Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

PRIVATE BUSINESS

TEIGNMOUTH QUAY COMPANY BILL (By Order)

SOUTH YORKSHIRE LIGHT RAIL TRANSIT BILL (By Order)

BEXLEY LONDON BOROUGH COUNCIL BILL (By Order)

SHOREHAM PORT AUTHORITY BILL (By Order)

Orders for Second reading read.

To be read a Second time upon Thursday 22 May.

MILFORD HAVEN PORT AUTHORITY BILL (By Order)

Order read for resuming adjourned debate on Question [18 February], That the Bill be now read a Second time.

Debate to be resumed Thursday 22 May.

BRITISH RAILWAYS (STANSTED) BILL (By Order)

Order read for resuming adjourned debate on Question [24 February], That the Bill be now read a Second time. Debate to be resumed Thursday 22 May.

HARWICH PARKESTON QUAY BILL (By Order)

Order read for resuming adjourned debate on Question [28 April], That the Bill be now read a Second time.

Debate to be resumed Thursday 22 May.

Oral Answers to Questions — NATIONAL FINANCE

Interest Rates

Mr. Andy Stewart: asked the Chancellor of the Exchequer if he will make a statement on the current level of interest rates.

Mr. Ottaway: asked the Chancellor of the Exchequer what effect his Budget has had upon the level of interest rates.

Mr. Hayes: asked the Chancellor of the Exchequer if he will make a statement on the present level of interest rates.

The Chancellor of the Exchequer (Mr. Nigel Lawson): Base rates have been reduced by 2 per cent. since the Budget.

Mr. Stewart: I thank my right hon. Friend for that continuing good news about the economy, particularly as it benefits the Exchequer, industry and mortgage payers. However, at what level would interest rates be if the Labour party implemented its £24 billion of expenditure?

Mr. Lawson: If it were to implement the extra £24 billion of public expenditure we would have substantial increases in taxation, possibly a VAT rate of 41 per cent., excessive borrowing, interest rates much higher than they are today, and no doubt before very long we would be in the hands of the IMF.

Mr. Ottaway: Is my right hon. Friend aware that a survey carried out among business men by the Nottinghamshire chamber of commerce showed that what concerned them most was high interest rates? With, I hope, inflation following West Germany down to zero, resulting in high real interest rates, will he please do whatever possible to bring interest rates down as soon as possible to try to alleviate the fears of those Nottinghamshire business men?

Mr. Lawson: My hon. Friend is right. It is important that interest rates should be brought down as much and as soon as is prudent. The 2 per cent. reduction in interest rates already since the Budget has been accompanied by a reduction in the mortgage interest rate of 1¾ per cent., which will come into effect on 1 June, which, on its own, is worth some £3·60 a week to the man or family with the average outstanding mortgage.

Mr. Hayes: Now that Cabinet government has been restored, that we have a balanced ticket and that the winds of change are sweeping through the Treasury, will my right hon. Friend accept that any relaxation of the rules governing the spending of capital receipts by local authorities from council house sales would not significantly affect interest rates?

Mr. Lawson: No, my hon. Friend is wrong. That could have an effect on interest rates. However, I am glad to see from the earlier part of his question that he appears to be fully content with the present state of affairs.

Mr. Penhaligon: When, within the strategy currently being pursued, does the Chancellor expect British interest rates to be as much below the international average as they are currently above it?

Mr. Lawson: The hon. Gentleman is right in saying that our level of interest rates is higher than the general level in major countries overseas. The relationship between interest rates in Britain and overseas is not unconnected with the fact that labour costs per unit of output are rising much faster in Britain than in our major competitors. That is the major weakness in the British economy at present, and it is a job for management to take a better grip of its costs. We shall then be able to see benefits in competitiveness and in interest rates as well.

Mr. Evans: If interest rates are falling so well and everything in the garden is so wonderful, why does unemployment continue to increase? I cite the announcement this week that 1,000 jobs will be lost at Kodak, that another 1,000 jobs will go at British Caledonian, and, as we heard yesterday, the appalling loss of 3,500 redundancies in the shipbuilding industry.

Mr. Lawson: The hon. Gentleman should have listened a little more attentively to my answer to the hon. Member for Truro (Mr. Penhaligon) a moment ago. Unemployment is all part of the same problem. Labour costs per unit of output are increasing far too quickly in this country, which prices workers in many of our industries out of jobs, as we are not as competitive as our rivals overseas.

Mr. Latham: Will my right hon. Friend confirm that the welcome reduction in interest and mortgage rates will at least do something to offset the deplorable increase in domestic and commercial rates imposed by Labour and Liberal councils, including in our county of Leicester?

Mr. Lawson: My hon. Friend is right about the county of Leicester, which both he and I represent. There is considerable unrest about the level of rates imposed by the Labour-controlled council. The same problem exists in much of the country. I am grateful to my hon. Friend for his remarks about the considerable benefits to the economy as a result of the Budget and the consequent reduction in interest rates.

Dr. McDonald: By exactly how much will bank interest rates in Britain have to be cut if they are to fall to the same level as real interest rates in America, Japan, France and Germany, our main competitors?

Mr. Lawson: Although it is difficult to measure precisely or accurately real interest rates, they are slightly higher in this country than in most other major countries. A Labour Government might considerably reduce real interest rates in the same way as always—by letting inflation go through the roof.

Freeports

Mr. Colvin: asked the Chancellor of the Exchequer when he expects to receive a report from the appointed consultants about reviewing the customs and tax regulations covering freeports; and if he will make a statement.

The Minister of State, Treasury (Mr. Peter Brooke): The consultants were appointed in July 1984 to undertake a five-year research study to enable an initial evaluation of the freeport experiment. Annual progress reports submitted by the consultants to date include assessments of the problems which have arisen in the operation of freeports.

Mr. Colvin: That is a long time to have to wait. Is my hon. Friend aware that the experiment is unlikely to prove successful unless he does something to get the Customs and Excise off the backs of the freeports? Some of us believe that the Customs and Excise was determined to ensure that the experiment failed before it even started. The freeports need to be wholly free of VAT. In some instances, the VAT regime inside the freeport is even worse than that outside it, which is hardly a recipe for success.

Mr. Brooke: I must rebut my hon. Friend's contention about the Customs and Excise. It has not changed any of the rules that were set out at the beginning of the freeports experiment. Freeports remain subject to European Community legislation. On the subject of consultants, there will shortly be an interim report.

Unemployment (Budget Effects)

Mr. Kilroy-Silk: asked the Chancellor of the Exchequer what is his latest estimate of the effect of the Budget on unemployment; and if he will make a statement.

The Chief Secretary to the Treasury (Mr. John MacGregor): While it is impossible to isolate the direct effect of the Budget, or indeed of any Budget, on unemployment, the hon. Gentleman will welcome the fact that nearly 1 million additional new jobs have been created since the last election.

Mr. Kilroy-Silk: Is it not a disgrace that with more than 4 million people unemployed so little attention was given to job creation in the Budget statement? Does that now show the Government's callous and uncaring nature? I can point to hundreds of people in my constituency and on Merseyside who have lost their jobs since the Budget statement. How many people can the Minister point to who have found jobs?

Mr. MacGregor: The hon. Gentleman knows perfectly well that the figures is not—

Mr. Kilroy-Silk: How many?

Mr. MacGregor: I shall answer the hon. Gentleman's questions. The hon. Gentleman knows perfectly well that the figure is not 4 million. The figure could amount to that only if he included the people in employment through various job creation measures. The Budget added considerably to the already very high total of expenditure being incurred on job creation, employment and training measures. When we took office the figure was under £400 million. By the end of these three years it will be £3 billion, which is a clear indication of the priority that we give this subject.

Mr. Forman: Is not the level of unemployment, both now and in the future, affected at least as much by unit labour costs, as was pointed out by our right hon. Friend earlier? Therefore, would it not be sensible to press ahead as rapidly as possible with schemes to make pay more profit-related, since that might help to redress some of the problem?

Mr. MacGregor: My hon. Friend is entirely right to draw attention again to the problem of unit labour costs, where the position is, if anything, deteriorating. I hope that employers and employees will take into account that


very important part of job creation—the Budget measures which reduced income tax for employees, which in many cases considerably increases their take-home pay.
My hon. Friend knows that we are engaging in discussions on profit sharing. I hope that that, too, will help to reduce unit 'about costs.

Mr. Wigley: Does the Minister recall that it was to encourage entrepreneurs to create jobs that the top rate of income tax was reduced from 84 to 60 per cent.? Will he set up a study to investigate whether a single job has been created by that?

Mr. MacGregor: It is clear that the whole series of tax measures, not just the one referred to by the hon. Gentleman, designed to encourage job creation and small business development have worked. The number of new businesses starting up and expanding has been very creditable under this Government compared with the record in the past, and is a major contributor to jobs.

Mr. Heathcoat-Amory: Will my right hon. Friend take up with employer organisations his disappointment over the fact that many firms prefer to increase the wages of existing employees by more than the rate of inflation, rather than take on additional staff? Does he agree that, by international standards, our performance in that respect is poor and is making unemployment worse?

Mr. MacGregor: My hon. Friend is putting the unit labour cost argument in another way. I agree with him that this practice does not help unemployment. It is important that all employers take note of the arguments. I pay tribute to the work of the CBI, which is tryng to get across that message, as we do in everything that we say.

Mr. Mason: Will the Minister answer the simple question embodied in the original question? What figure can he give for a reduction in the dole queues as a result of the last Budget?

Mr. MacGregor: The last Budget was not very long ago—[HON. MEMBERS: "Answer."] The right hon. Gentleman must recognise that there have been increases in net new jobs in this country on a scale greater than in the remainder of western Europe put together as a result of the last three Budgets and the policies that we have been pursuing.

Mr. Nicholls: Does my right hon. Friend agree that the effect on employment cannot be considered in isolation from the basis on which the unemployment figures are calculated? For example, the severely disabled and single-parent families can be included in unemployment figures, as can people over 60, who sign on simply to obtain their national insurance tax credits. Figures that include such people cannot be treated as an accurate reflection of unemployment.

Mr. MacGregor: It is clear that some people are included in the unemployment figures—and there have been various calculations of the number—who are not actively seeking work.

Mr. Terry Davis: Will the Chief Secretary confirm that his figure of 1 million new jobs since 1983 includes about 250,000 second jobs—second jobs obtained by people who already have jobs; second jobs that are often part-time jobs? Is it not true that there are still 1 million

fewer people in employment today than there were in 1979, even allowing for everything that has happened since 1983?
As the Minister has referred to the rest of Europe, will he confirm that, under this Government, Britain has not only lost more jobs since 1979 than any other member the Common Market, but has lost more jobs than all the other countries in the Common Market added together?

Mr. MacGregor: There are some people in the figures—we do not know yet how many, but the number will be small and not on the scale suggested—who have two jobs. We shall eventually discover the number when the surveys have been completed. That does not diminish the fact that there has been a substantial increase in the number of people—the figure is close to the number of net new jobs—who are new to the work force. I do not know why the hon. Gentleman keeps criticising the Government for the number of new jobs that are part-time jobs. Part-time jobs will always have a major contribution to make to the economy. It is interesting to observe that part-time jobs contributed to more than half the increase in the number of jobs under the previous Labour Government.

Personal Equity Plans

Mr. Freeman: asked the Chancellor of the Exchequer what representations he has received on the proposed establishment of personal equity plans.

Mr. Lawson: A considerable number, most of which have warmly welcomed the proposal.

Mr. Freeman: Will my right hon. Friend confirm that since 1979, when the Government came into power, the proportion of the population owning shares has doubled from 7 to 14 per cent.? Will he accept that this has been a substantial achievement? As we are now to have personal equity plans, does my right hon. Friend agree that it would be reasonable to aim for 20 per cent. of the population to own shares, which is close to the percentage in the United States?

Mr. Lawson: Yes. The most recent survey conducted by National Opinion Poll showed that the proportion of adults directly owning shares has doubled since 1979 along the lines that my hon. Friend suggested. This has arisen largely as a result of two factors. First, there has been a sharp growth in employee share schemes. Secondly, there has been the Government's privatisation programme, especially British Telecom. We are now adding a third leg to what will become a tripod with the introduction of personal equity plans, which, as I said in my earlier answers, have had a warm welcome throughout the community.

Mr. Wrigglesworth: Does the Chancellor accept that personal equity plans would be even more widely and enthusiastically accepted and welcomed if they gave greater incentives than are at present planned? Does he accept also that the great prize for British industry would be to have an agreement which extended across the political parties on this scheme and on the right hon. Gentleman's profit-sharing scheme, which we very much welcome, which he introduced at the NEDC on Monday? Will he incorporate in the discussions on these matters not only both sides of industry but the other parties?

Mr. Lawson: I shall always be happy to listen to representations from the hon. Gentleman and from anyone


else before the scheme finally comes into full operation on 1 January 1987. I am glad to know that the hon. Gentleman welcomes the tax concessions under the personal equity plan of complete freedom from income tax on dividends and of capital gains tax on disposals, proposals which were never put into play under the previous Labour Government, of whom the hon. Gentleman was such an avid supporter.

Mr. Skinner: Does the Chancellor of the Exchequer recall that after the findings of the National Opinion Poll were published it was suggested by many, and reported, that the increase in share owners from 7 to 14 per cent. arose because there had been a lot of double counting? Will he confirm that the greatest increase of share ownership that has taken place pro rata is in the Government and the Cabinet itself, with nine members of the Cabinet owning shares and with the Prime Minister and the Secretary of State for Transport leading the way by making money out of the coal strike and privatisation, only to be superseded by the hon. Member for Stockton, South (Mr. Wrigglesworth), who represents Barclays Bank in this place?

Mr. Lawson: I regret that I was not able to hear much of what the hon. Gentleman said. Modern Cabinets may be rather large, but to suggest that they account for 14 per cent. of the adult population of Great Britain is going a little far.

Mr. Tim Smith: Is my right hon. Friend aware that the refinements to the scheme, which were announced by the Treasury this week to include unit trusts, are very welcome? Who is to issue the plans if the Financial Services Bill does not become law by 1 January of next year, which seems likely?

Mr. Lawson: It is important that the Financial Services Bill should become law by 1 January next year, as I am sure my hon. Friend agrees. If that were not so, special arrangements would have to be in force for the interim period.

Gold Reserves

Mr. Ron Brown: asked the Chancellor of the Exchequer what is the value of the United Kingdom's gold reserves.

The Economic Secretary to the Treasury (Mr. Ian Stewart): $6·1 billion.

Mr. Brown: As there seem to be some goodies in the kitty, despite the recession, would this be an opportune time to return Albania's gold to its rightful owners—the Albanian Government? Must we not face that issue?

Mr. Stewart: I should explain to the hon. Gentleman that the figure for which he asked and the answer which I gave related to the United Kingdom's gold reserves. His question on Albania relates to gold that is held on behalf of the Tripartite Commission for the Restitution of Monetary Gold, in which the United States, the United Kingdom and France are joint participants.

Mr. John Browne: Does my hon. Friend accept that the question of gold reserves has been brought into stark focus by the enormous increase in the number of financial instruments and the financial pyramiding involved, and by the vast increase in trading volume throughout the world?

The question arises as to the implications for the financial community of any failure of settlement. Is it not prudent for the Government to increase their gold reserves at such a time?

Mr. Stewart: Total reserves have been increasing. In fact, in the past few months there has been a rise on every occasion. We judge the present balance between gold and convertible currency to be about right in present circumstances.

Public Expenditure

Mr. Alan Howarth: asked the Chancellor of the Exchequer what is his latest projection for public expenditure as a proportion of gross domestic product in 1986–87.

Mr. MacGregor: The latest estimate of general Government expenditure as a percentage of gross domestic product for 1986–87 is 42½ per cent.

Mr. Howarth: Does my right hon. Friend agree that we are by no means achieving full value for our existing public expenditure on health and education? Although it is far from certain that a more relaxed approach to public expenditure would produce better public services, we know all too well from experience that it would lead to higher taxes, higher interest rates and higher unemployment. Will my right hon. Friend underline that truth to the alliance parties, which want to spend an extra £10 billion, and to the Liberal party in Warwickshire, which proposed a rate increase of 23·3 per cent. and more? I am happy to say that those Liberals failed to impress the electorate.

Mr. MacGregor: My hon. Friend was correct in the first part of his question. That is why, in addition to establishing priorities in public expenditure, we are concentrating so much on getting value for money in all the programmes. I am sure my hon. Friend will be pleased to know that, as a result of efforts in obtaining value for money in the Health Service, about £150 million a year extra has been devoted to real front-line care. We must continue with such an approach. My hon. Friend was entirely right in the second part of his question. As we saw under the last Labour Government, those were precisely the consequences, and they would be repeated under the proposals put forward by the Liberals and the SDP.

Mr. Madden: How much is it costing the Government to sustain record unemployment?

Mr. MacGregor: The figures for unemployment benefit are in the public expenditure White Paper. If there is ever-increasing public expenditure, it has to be paid for in other ways, which loses real, permanent jobs elsewhere.

European Monetary System

Mr. Knox: asked the Chancellor of the Exchequer when he next proposes to have discussions with the European Community Council of Ministers about the European monetary system.

Mr. Ian Stewart: Aspects of the European monetary system come up for discussion from time to time.

Mr. Knox: Can my hon. Friend think of more suitable circumstances than those that obtain at present for Britain to join the exchange rate mechanism of the EMS? If not, why do we not join?

Mr. Stewart: We have always made it clear that we see both advantages and disadvantages in membership of the exchange rate mechanism of the EMS. We keep it under review. We would need to be satisfied that there was a clear balance of advantage before joining.

Mr. Meadoweroft: What is the right basis on which we should join the EMS?

Mr. Stewart: The hon. Gentleman makes a fundamental mistake in assuming that membership of the ERM is determined solely on the basis of prevailing rates of exchange between sterling and other currencies. A range of other matters, such as volatility and the technical arrangements of the mechanism itself, must be taken into account.

Mr. Budgen: When my hon. Friend has an opportunity to speak to my right hon. Friend the Chancellor, will he tell him that it would be a good thing if he told his many friends among the fashionable economic commentators that the Prime Minister's opposition in principle to joining the EMS is neither eccentric nor isolated, and that many hon. Members on both sides of the House would deeply resent the loss of national sovereignty that would occur if we were to join?

Mr. Stewart: I note what my hon. Friend has said and, if I get an opportunity to see my right hon. Friend the Chancellor, I shall pass on his remarks. My hon. Friend's question and the question raised by my hon. Friend the Member for Staffordshire, Moorlands (Mr. Knox) illustrate the fact that people can hold different opinions on this matter.

Mr. Evans: When the Minister next meets his European colleagues to discuss European matters, especially the ecu, will he inform them of the Chancellor's new-found enthusiasm for profit-sharing by employees as part of their wages? Will the hon. Gentleman inform his European colleagues that the Government are prepared to accept the modest Vredeling proposals on employees having the right to information about their companies?

Mr. Stewart: The hon. Gentleman's question is rather far from the question of the European monetary system. However, I am glad that he has some words of approval for my right hon. Friend's profit-sharing proposals.

Mr. Dorrell: If, as my hon. Friend said, there are advantages and disadvantages in joining the EMS, what is the critical disadvantage that keeps us out of it, and therefore keeps our currency fluctuating, in preference to a sound, stable currency at a fixed rate against the currencies of our major European partners?

Mr. Stewart: Two or three months ago I went into these questions at some length in a debate in the House, and I shall gladly do so again outside the Chamber with my hon. Friend. Clearly, in considering the EMS, we must recognise that joining would not be an easy option. My hon. Friend's point about the movement of the exchange rate between sterling and the continental currencies is only part of the picture. It is a mechanism, and a number of its aspects must be taken into account.

Income Tax

Mr. Sackville: asked the Chancellor of the Exchequer what is his latest estimate of the proportion of

income tax revenue paid by the 10 per cent. of taxpayers with the highest incomes; and what was the comparable proportion in 1979–80.

Mr. MacGregor: The proportion is 37½ per cent. in 1986–87, compared with 34 per cent. in 1979–80.

Mr. Sackville: Is that proportion not further evidence that the sky-high tax rates of the last Government were counter-productive and that our reductions in those rates produced a greater, not a smaller, tax yield, to the benefit not only of high rate taxpayers but taxpayers in general?

Mr. MacGregor: My hon. Friend is right. It demonstrates what we have always said—that lower taxes provide encouragement and motivation leading to greater earnings and hence to greater achievement. As my hon. Friend has implied, that is in sharp contrast to the Labour party's policies. It is fairly clear that at the moment the Labour party simply cannot add up the figures. Recently, the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) made a speech in which he said that people earning more than £30,000 a year would have to pay more tax. Just to get anywhere near the yield that the right hon. Gentleman seeks would mean total confiscation of earning over £30,000 a year. It is hard to say how that encourages motivation or provides greater tax yields.

Mr. Campbell-Savours: Is it not true that, once again, the right hon. Gentleman misrepresents the figures? [Interruption.] He knows that a Labour Government would increase—[Interruption.] Mr. Speaker—

Mr. Speaker: Order. Mr. Campbell-Savours.

Mr. Campbell-Savours: The Minister knows that the next Labour Government will increase capital gains tax and capital transfer tax, and by raising those revenues, in addition to the revenues raised from those who are paid higher levels of salary, we will fund Labour's programme.

Mr. MacGregor: Because of the—

Mr. Campbell-Savours: Just stick to the facts.

Mr. MacGregor: Because of the growth in the economy and growth in capital values, the yield from capital taxes has also gone up under this Government. I will stick to the facts. The facts are that the yield from the capital taxes, which the Labour party says it will increase, will fall far short of financing the programme put forward by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) and his party. An additional £1·9 billion would be required—I am giving the facts—and even if, as the right hon. Gentleman said, people earning more than £30,000 had to pay more tax, with the implication that others would not, and even if they all were prepared to go on earning at their present rate, with total confiscation of all earnings above £30,000, it would yield only £1½ billion. Those are the facts, and they show that the policy is nonsense.

Mr. Fallon: Does my right hon. Friend agree that his target of 25 per cent. income tax may just be a marker to some people, but means a great deal more to millions of low-paid workers? If he cannot convince his colleagues that consolidation is no policy for the poorly paid and disadvantaged, how can we persuade the public?

Mr. MacGregor: My hon. Friend is right. The purpose of the tax changes in the Budget and of the long-term target of 25 per cent. is meant to be of great benefit and is mainly directed to those on modest incomes.

Mr. Penhaligon: Is not another interpretation the possibility that those job-destroying pay rises, to which the Chancellor referred, have gone to those who are already the highest paid?

Mr. MacGregor: No. If unit labour costs as a whole are going up, that cannot mean that they are confined to only a small band of income earners. The truth is that it is happening across the whole field. That is why the tax changes we have introduced in the Budget will, I hope, help to prevent those rises taking place.

Inflation

Mr. Andrew MacKay: asked the Chancellor of the Exchequer if he will make a statement on the current level of inflation.

Mr. Lawson: Over the 12 months to March 1986 the retail prices index increased by 4·2 per cent. and I expect tomorrow's figure to be substantially better.

Mr. MacKay: Does my right hon. Friend agree that these exciting prospects could be put in jeopardy if employers in the private sector were to continue to concede irresponsible and inflationary wage settlements, with their consequent effect on unit labour costs, the efficiency of British industry and job prospects?

Mr. Lawson: My hon. Friend is right to talk about the dangers of excessive increases in unit labour costs. However, the consequences will be felt not so much on inflation as on employment and jobs. That is the problem at present. Another and much greater threat to inflation would be if, by any mischance, any of the Opposition parties were to gain office.

Mr. Ashton: When the Chancellor set out on his policy to reduce inflation to this level, did he know that it would create unemployment of nearly 4 million?

Mr. Lawson: It is not inflation that has created unemployment. In fact, the reverse is the case. Rising inflation is bad for jobs. The inflation record of this Government is something of which the whole nation can be proud.

Mr. Robert B. Jones: Will my right hon. Friend confirm that inflation is not a disease, the cure for which is to forget about it, but a constant pressure in the economy which requires the consistent approaches which we have had until now and which we need in the future?

Mr. Lawson: My hon. Friend is right. The achievement of the Government in getting inflation down as far as we have—it is going down still further—is something which nobody in this country should take for granted.

Mr. Winnick: Is it not interesting that despite all the boasting by the Chancellor about inflation rates, the electorate, at every opportunity since the Budget, have decisively rejected policies which they know mean continuing mass unemployment and cuts in housing, education and the Health Service? Is it not also interesting to note that not only are the public not convinced, but that

Cabinet colleagues of the Chancellor are not convinced, such as the Leader of the House, who, in a television interview on Sunday, made it perfectly clear that there must be alternative policies to those pursued by the Prime Minister and the Chancellor?

Mr. Lawson: The Cabinet is united on the importance of getting inflation down, and keeping it down. There is no benefit to this country in inflation going up. Let me say, too, that low inflation is of the greatest importance to those who are seeking jobs.

Confectionery (Value Added Tax)

Mr. Gregory: asked the Chancellor of the Exchequer what value added tax revenue he expects to raise through United Kingdom confectionery sales in the current financial year.

Mr. Brooke: It is estimated that the revenue yield from sales in the United Kingdom of chocolates, sweets and similar confectionary will be about £375 million in 1986–87.

Mr. Gregory: Ever since confectionery in this country has been subject to purchase tax, and subsequently to VAT at the standard rate, there has been a major shift in people's dietary habits. Three cooked meals a day are no longer the norm. Confectionery is part of the daily habit. How much longer can the Chancellor justify taxing confectionery, as it is part of the normal consumption of United Kingdom nationals?

Mr. Brooke: I know my hon. Friend's constituency interest in this matter. I applaud his support for the great confectionery manufacturers there, but I cannot hold out hope that the present VAT treatment of confectionery will change. I remind the House that it was the right hon. Member for Leeds, East (Mr. Healey), in his first Budget in 1974, who standard-rated chocolate.

Sir Kenneth Lewis: Is my hon. Friend aware that I hope very much that he will not increase tax on confectionery in the way in which my right hon. Friend the Chancellor treated the tax on tobacco in the Budget, increasing it by more than the rate of inflation? As a result of that increase there will be a reduction not only in tax receipts from tobacco, but in jobs, as has happened in Northern Ireland, where 900 jobs have been lost. Will my hon. Friend please stop listening to the exaggerated lobby on tobacco smoking, because that is what it is?

Mr. Speaker: Order. The question is about confectionery.

Mr. Brooke: As you say, Mr. Speaker, the question is about confectionery, but the tobacco yield remains buoyant.

Depositary Receipts

Mr. Weetch: asked the Chancellor of the Exchequer what representations he has received about his recent statement on American depositary receipts.

Mr. Ian Stewart: We have received a number of letters, generally welcoming the changes.

Mr. Weetch: Is not the Treasury's recent announcement of a reduction in the tax on conversion of depositary receipts from 5 to 1½ per cent. a straight post-Budget tax


handout to the City of London? When the Chancellor framed his Budget fixing the rate at 5 per cent., was that not a quid pro quo for tax forgone for a lower rate of stamp duty? What has happened to the Chancellor's calculations now? Is this not yet a further example of a Chancellor fixing policies, and well-placed strategic groups in the City of London weakening his resolve and ultimately destroying it?

Mr. Stewart: No. It is not any of those things. In the light of representations that we received following the Budget, my right hon. Friend the Chancellor was satisfied that our objectives would be achieved in relation to preserving the revenue from stamp duty with a rate of 1½ per cent. instead of 5 per cent. Under those circumstances, it was a perfectly proper change to make.

Sir William Clark: Does my hon. Friend agree that depositary receipts are an admirable way of funding, particularly expansion overseas, and that that applies not only to American but to European depositary receipts? In view of the fact that our American colleagues are against the tax, does my hon. Friend think that that will jeopardise the negotiations that are now going on for the abolition of the unitary tax system?

Mr. Stewart: I am sure that there is no direct connection between those two matters. If British companies wish to raise funds abroad, I have no reason to think that there will not be a satisfactory and active market in ADRs at the rate of 1½ per cent., since they were growing very rapidly indeed in the months before the Budget at the rate of 1 per cent.

Mr. Blair: Does the Economic Secretary to the Treasury recall that his right hon. Friend the Chancellor of the Exchequer sold this proposal to cut stamp duty and give away £70 million on the basis of this special rate of 5 per cent.? How does he intend to make up the revenue? Why is it that whenever the pensioners knock on the Government's door the Government are hard with them, as they are hard with the sick, the unemployed and the disabled, but are always soft with the City?

Mr. Stewart: If I had time, Mr. Speaker, and if I were in order, I should like to explain at length the many things that this Government have done to help the disabled. When my right hon. Friend the Chancellor of the Exchequer made his announcement, subsequent to the Budget, about stamp duty changes, he pointed out that they would be revenue-neutral and that therefore there would be no loss of revenue to the Exchequer.

Oral Answers to Questions — PRIME MINISTER

Engagements

Mr. Sheerman: asked the Prime Minister if she will list her official engagements for Thursday 15 May.

The Prime Minister (Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.

Mr. Sheerman: Given the further relentless rise in the unemployment figures that have been announced today and the depressing long-term trend, together with the announcement yesterday of the loss of 3,500 jobs in the

British shipbuilding industry and the announcement today of the loss of 1,000 jobs at British Caledonian, will the Prime Minister now announce that she will reverse the disastrous economic polices that she has pursued for the last seven years, or that she will call a general election so that Labour can create genuine jobs?

The Prime Minister: No, Sir. I did not notice that Labour did particularly well during the last two by-elections. I am sure the hon. Gentleman noticed that the labour force survey confirmed the overall increase in the number of jobs during the last three years to have been 1 million. I am the first to say that we need more shipbuilding orders, but there are very few of them. However, the hon. Gentleman heard yesterday that my right hon. Friend the Secretary of State for Trade and Industry is to take a number of measures to help unemployment in those regions. An enterprise company is to be set up through British Shipbuilders.

Sir Edward du Cann: Has my right hon. Friend noted the deep anxiety with which, on both sides of the House, the announcement about the decline in Britain's shipbuilding capacity was greeted yesterday? Will she reexamine the many constructive proposals that have been put forward for the development of policies to encourage the expansion of the British merchant fleet—national, European and international—upon which the health of all the marine industries depends? May I beg her to bear in mind that the decline in the British merchant fleet and in our shipbuilding capacity is the most serious mater from the point of view of both the economy and defence? It could be changed and it should be changed.

The Prime Minister: My right hon. Friend will be the first to know that the future of British Shipbuilders depends upon success in winning new orders. We are taking a number of measures, particularly with regard to soft credit, to ensure that we can compete on an equal basis with other people. My right hon. Friend will be aware of the tremendous number of surplus ships in the world, amounting to 40 million tonnes, whereas the world capacity is 18 million tonnes. Therefore, the surplus would replace the world capacity.

Mr. Kinnock: Unemployment stands at 3·3 million. Today's figures show the biggest loss in manufacturing jobs in recent years. In the light of that, and in the light of the case that has just been made, not for the first time, by the right hon. Member for Taunton (Sir E. du Cann), will the Prime Minister now adopt a policy for British shipbuilding of scrap and build, and bring forward public sector orders in order to sustain work and skills in the yards, especially in those areas of very high unemployment? Alternatively, does the Prime Minister intend to stand aside and let British Shipbuilders join the long and growing list of those industries that have become her economic victims?

The Prime Minister: The right hon. Gentleman will be aware that there are very few shipbuilding orders about in the world and that many other shipbuilding countries have had to close their shipyards. The Swedes have effectively abandoned merchant shipbuilding, the Dutch Government have refused to support their industry to build the sister ship to the large North sea ferry—won by Govan—the Japanese are having to adjust to the shortage of orders, the Germans have cut their capacity by


half and the French are also cutting capacity. The fact is that there have been so many subsidies for building ships that they have been built and there is surplus tonnage to the tune of 40 million tonnes. There is no point in scrap and build, as there are already too many ships.

Mr. Kinnock: In Japan the unemployment rate is 2·6 per cent., in Sweden it is 2·8 per cent. and in every country which the right hon. Lady has mentioned the unemployment rate is lower than that of Britain, which is nearly 14 per cent. and much lower than the level of nearly 18 per cent. in the northern region of Britain. Different circumstances require different responses. Why will the Prime Minister not look at the option of scrap and build and the option of bringing forward public sector orders for shipbuilding, so as to sustain, for this maritime nation, a viable merchant shipbuilding industry?

The Prime Minister: There are still merchant shipbuilding yards, which I hope will continue. We are trying our level best to get more orders, in particular for Sunderland. With regard to what the right hon. Gentleman has said about full employment in those countries, may I point out that those countries have not attempted to shore up older industries, but have vigorously embraced the new technologies, and that is what we must do.

Mr. Soames: Will my right hon. Friend join me in regretting today's announcement by British Caledonian of nearly 1,000 redundancies, many of whom are my constituents [Interruption]—

Mr. Speaker: Order. This is an important question concerning a Member's constituency.

Mr. Soames: In the light of this sad news, will my right hon. Friend have a word with my right hon. Friend the Secretary of State for Transport and ask him to overturn his appalling decision to revoke the licence for the air link between Gatwick and Heathrow?

The Prime Minister: My right hon. Friend has heard what my hon. Friend has said. I regret that British Caledonian found it necessary to make cuts as a response to lower levels of traffic. Much of the reason for falling traffic has been over-exaggerated fears of terrorism, especially in the United States of America. We are doing everything possible to make them realise that this country has a safer capital than almost any other one in Europe.

Mr. James Callaghan: The fact that the Prime Minister quotes countries like Sweden and Germany shows that the Government do not yet understand that there is a strategic necessity to maintain a maritime presence in this country. If she is looking for orders, why not bring forward the naval programme, especially for the large number of coastal vessels, oil rig protection vessels, guard ships and others that are required by the Royal Navy to overcome this cyclical deficiency? If the Prime Minister does not do so, nobody will believe that the Government are making the maximum efforts to preserve this strategic industry.

The Prime Minister: The right hon. Gentleman is aware that there is still merchant shipbuilding capacity in this country. He is also aware, as I have said, that the surplus tonnage of ships is already of the order of 40 million tonnes. There is little point in building more when we have that surplus.
With regard to naval ships, the right hon. Gentleman will also be aware that we have brought forward one of the

AOR fleet to help Swan Hunter, and that last year we ordered four major and three smaller warships. That is for the warship yards, which, as the right hon. Gentleman knows, are quite different from the merchant shipbuilding yards.

Mr. Portillo: asked the Prime Minister if she will list her official engagements for Thursday 15 May.

The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.

Mr. Portillo: If my right hon. Friend turns her attention today to the reallocation of resources in the Health Service to help the worst-off areas, will she reflect on the fact that that policy was originally sponsored by the right hon. Member for Plymouth, Devonport (Dr. Owen), who is now the leader of the SDP, that it has been supported by both parties when in office and that, even so, in London, under that policy, 70,000 more patients are now being treated than were treated when the Government came to office?

The Prime Minister: My hon. Friend is absolutely correct. The policy of reallocating health resources away from London because the population of London was falling and to try to equalise health provision throughout the country was started by the Labour Government and has been continued by this Government. Nevertheless, the number of patients being treated in London has still increased—70,000 more in-patients, 70,000 more day cases and 50,000 more out-patients are treated each year. London continues to have about 20 per cent. of expenditure on the hospital services, for about 15 per cent. of the population, so it is still improving its services.

Dr. Owen: When the falling competitiveness of British industry can be desribed as appalling and alarming today by the Prime Minister's own Employment Secretary, does it not show the completely broken-backed nature of the Government's industrial strategy and that unemployment will continue to rise until there is an income strategy which affects the private and the public sectors?

The Prime Minister: The right hon. Gentleman had a strict income strategy the last time he was in government as a Labour Minister. He also had a strict prices strategy to keep prices down. Inflation is now much lower than it ever was then. The strategy collapsed in the winter of discontent. The right hon. Gentleman would be very rash even to consider bringing it back.

Mr. Peter Bruinvels: Will my right hon. Friend join me in congratulating Leicester city Conservatives and their leader. Councillor Michael Johnson, on gaining two council seats from Labour and a 7·5 per cent. swing to the Conservatives in Leicester, East? Is she aware that it was done by hard work, far too high rates—an 80 per cent. increase—Nelson Mandela park and a twinning arrangement with Nicaragua?

The Prime Minister: I gladly congratulate my hon. Friend on the excellent results that he achieved in the local government elections.

Dr. M. S. Miller: asked the Prime Minister if she will list her official engagements for Thursday 15 May.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Dr. Miller: Does the Prime Minister intend totally to ignore the lambasting that she has received from the Office


of Health Economics, which shows that the United Kingdom is among the lowest spenders on health of all the developed countries of western Europe? Does she still maintain that the Health Service is safe in her hands? That claim runs entirely counter to the experience of doctors, nurses, Health Service workers and patients. When will she fund the Health Service to cater for the legitimate needs of the population, taking account of the fact that people are living longer and that we live in a technological age?

The Prime Minister: If the hon. Gentleman considers the figures carefully, he will see that the proportion of public funds spent is not different. The difference occurs because, in many of those countries, people choose to spend far more of their own money on health, on top of state provision. Some of the countries with the top figures spend enormous sums on health privately. Far more is spent on health in Britain than a few years ago. Far more patients are treated—[Interruption.] Of course Opposition Members do not like it, but they will hear it. Far more patients are being treated, which is what matters. Patient services have increased, waiting lists have fallen and the number of staff in the NHS who deal directly with patients has increased—nurses and midwives by 60,000 and doctors and dentists by 10,000. I am grateful for the opportunity to give those excellent figures.

Mr. Jim Callaghan: asked the Prime Minister if she will list her official engagements for Thursday 15 May.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Callaghan: Is the Prime Minister aware that, despite her declared intention to create a property-owning community, a recent report by the Association of Metropolitan Authorities has produced some disturbing and alarming figures on mortgage arrears? Is she aware that one in 10 families are declared homeless because they cannot pay their mortgages? Is she aware that the number of those in great financial difficulties with their mortgage repayments has increased by 40 per cent. in the past six months? In view of those disturbing figures, what will she do about the problem?

The Prime Minister: The number of mortgage defaults is extremely small compared with the enormous number of people who take out fresh mortgages every year and the great success of the Government in increasing the number of owner-occupiers. Last year more than 1 million new mortgages were given and 1·3 million new homes were built. Home ownership is up to 62 per cent. from 56 per cent. in 1979.

Mr. Wilson: asked the Prime Minister if she will list her official engagements for Thursday 15 May.

The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.

Mr. Wilson: Does the Prime Minister realise that following last week's huge fallout of radioactivity in Scotland, which was the heaviest in the United Kingdom,

there is a tremendous revulsion against nuclear power? Does she know that the Torness AGR reactor is at present being fuelled up to go into commission, but is not yet in action? As there is 80 per cent. surplus capacity in nuclear generating in Scotland, will she take account of those feelings in Scotland on the issue of nuclear power and instruct forthwith that Torness be not commissioned?

The Prime Minister: No. Many people were pleased to have the Torness reactor built in Scotland, and many people in Scotland have great faith, as we have, in nuclear power as a way of generating electricity. I hope that the hon. Gentleman will have great faith in our most excellent Nuclear Inspectorate, which does a tremendous job. [Interruption.] I see that he says no. That is what he thinks about the Nuclear Inspectorate, but I am sure that that view is not shared by the rest of the House, nor by the majority of people in Scotland.

Mr. Hayes: On a point of order, Mr. Speaker. My hon. Friend the Member for Crawley (Mr. Soames) made a serious point to my right hon. Friend the Prime Minister about many of his constituents who are being made unemployed today. You may recall that several Opposition Members responded by cheering and laughter—[Interruption.]

Mr. Speaker: Order. That is not a point of order.

Mr. Hoyle: On a point of order, Mr. Speaker. I ask you for a ruling to correct an inaccurate statement made yesterday. At Question Time I asked the Minister of State, Department of Trade and Industry whether his right hon. Friend the Secretary of State had met Mr. Robert Stempel of General Motors in New York on 4 May. In reply the Minister said that his right hon. Friend had not met him. The Minister mislead the House with that reply, because he did not say that he had had that meeting. Today l tried to table a question so that the Minister could come to the House and correct that misleading statement, but the Table Office would not allow me to do so. I ask that you allow me to table that question.

Mr. Speaker: I shall look into the matter. As I understand it, the hon. Gentleman asked the Table Office and was told that there was a question on the Order Paper today and that he should wait until the answer was available before tabling his question.

Mr. Bell: On a point of order, Mr. Speaker. While not in any way challenging your ruling on the first point of order in relation to unemployment in Crawley, may I ask whether it can also be said that it was an incorrect statement of fact? There was no cheering by the Opposition at unemployment in Crawley, just as there is no cheering by Conservative Members at unemployment in Middlesbrough.

Mr. Speaker: Cheering at Prime Minister's questions is legitimate, and today it was somewhat louder than it normally is. We have robust debates in this place, but it is incumbent on the House to give a fair hearing to whoever is on his or her feet.

British Shipbuilders (Statement)

Mr. Bob Clay: On a point of order, Mr. Speaker. I refer you to column 716 of yesterday's Official Report, Mr. Speaker, and the reply that the Secretary of State for Trade and Industry made to my hon. Friend the Member for Middlesbrough (Mr. Bell) on the British Shipbuilders statement. My hon. Friend the Member for Middlesbrough said:
He has mentioned Cuba and China, but he has not said whether, if those orders transpire, the yards that he has mentioned today for closure will stay open. Will he now give the House the commitment that, if those orders transpire between now and the end of the year those yards, including Smith's Dock, will stay open?
The Secretary of State replied:
If an adequate number of orders can be found to keep those yards open, that will be highly desirable and something that I would welcome."—[Official Report. 14 May 1986; Vol.97. c. 716.]
He went on to say that he thought that it was highly unlikely. However, he clearly indicated that, if orders were available at a sufficient level, the decision on those yards and on redundancies by other yards that are not closing could be reversed—

Mr. Speaker: Order. As far as I can judge from what the hon. Gentleman is saying, these are not matters for me. I think that they should correctly be put to the Leader of the House at business questions. If the hon. Gentleman will contain himself, I will give him that opportunity.

Mr. Clay: Further to that point of order—

Mr. Speaker: Order. I am not responsible for what Ministers say at the Dispatch Box, nor can I adjudicate upon it. I will give the hon. Gentleman an opportunity to raise that point with the Leader of the House who may well be able to give him the answer that he requires. I cannot.

Mr. Clay: Further to that point of order—

Official Report

Mr. Tony Benn: On a point of order. Mr. Speaker. I rise on a point of order relating to the accuracy of the Official Report. I rang your office this morning to draw attention to it, because it apparently is the case that instructions have been given to the Official Reporters that comments made by Members from a sedentary position are not to be reported. Hon. Members on both sides of the House occasionally make such comments, and sometimes the Minister or the Member thus interrupted makes a reference to the interruption which is then deleted.
I am not asking you to give a ruling today, but it is a very important question, Mr. Speaker. The full flavour of the House is contributed to not only by Members on their feet but by Members from a sedentary position. Also, now that the sound archives are available, anyone listening to the sound archives would hear the sedentary comments but would not find them reported in Hansard. I understand that instructions have been given that sedentary interruptions are not to be reported and, indeed, that certain other phrases that have been used in the House are to be deleted.
As you will know, Mr. Speaker, "Erskine May", on page 237, says that you are responsible, through the Clerk of the House, for the accuracy of the Votes and Proceedings, and through the Editor, whom you appoint, for the Official Report of debates, but that the Editor of Hansard is himself responsible for the preparation of an accurate report. I read from "Erskine May" at page 249:
The Editor is responsible for producing a verbatim report on proceedings in the House … for the publication in the Official Report.
The point that I make, Mr. Speaker. is that this affects the integrity of the record. No other Member is allowed to have his phrases removed, and if the Speaker were. through the Clerk, to give instructions, it would affect the integrity of the record. I do not expect that you are able to give a ruling today, but I ask you to consider very carefully either whether this should be referred to the Procedure Committee or alternatively whether, as with the Library and computer bureau, there should be a Committee of the House that overlooks the preparation of Hansard where, hitherto, discretion on whether to report or not to report has been left to the Editor then supervising the preparation of the record.
Mr. Speaker, it is a very big question that I raise. I hope that you will not hasten to reply at once, but I believe that this is a matter that affects the records of Parliament and, indeed, the integrity of its report.

Mr. Speaker: It is an important matter and I am able to reply because the right hon. Gentleman kindly gave me notice that he was going to raise this matter.
May I make it plain to the House that there is nothing new in what I said yesterday. The practices followed in compiling the Official Report are of long standing and are as follows. First, sedentary comments are not reported unless they are taken up either by the Member who has the Floor or by the Chair.
Secondly, if the Chair calls for order or the Member on his feet takes up a group of comments, that is normally reported by the word "interruption". I believe that these practices should be closely observed. I am sure that the House would not wish the occupant of the Chair to rise every few minutes to deal with sedentary interruptions.


Nor do I think that the House would wish a Member to be put on the record when he has not been called by the Chair, either to speak or to intervene in a speech.

Hon. Members: Hear, hear.

Mr. Benn: Further to that point of order, Mr. Speaker. I fully respect what you have said, but I ask you to consider two things. First of all, as I understand it, the discretion has hitherto been left in implementing the rules to the Official Reporters and the Editor for the day. Secondly, yesterday, it so happens, my hon. Friend the Member for Bolsover (Mr. Skinner) made an intervention that was the subject of a reply by the Front Bench Minister who was then speaking. I understand that the instructions were that that was to be removed. I am sorry, Mr. Speaker, that you felt it necessary to give a ruling today, because I urge you to consider the danger of the sound archives recording what actually happened and Hansard recording what the Clerk, on your instructions, told Hansard to report. I beg you to give consideration to this matter, and perhaps allow it to be referred to the Procedure Committee.

Mr. Speaker: The right hon. Member, and any other Member, can refer such matters to the Procedure Committee—that is not a matter for me. I cannot go beyond what I have said. This is a principle of long standing, and I do not think that the House would wish to have it changed. I rather sensed that from the response that I received.

Mr. Andrew Faulds: Further to that point of order, Mr. Speaker. You may recall that some of us occasionally make interventions from a sedentary position—

Mr. Alf Dubs: Never.

Mr. Faulds: Occasionally. I have now been here a long time—more than most hon. Members—[Interruption.] and there are many more years to come. I recall, and I am sure that you will endorse my argument, Sir, that in those earlier days, frequently sedentary interventions were recorded, whether there was a riposte or not, and they very frequently enlivened the debates, often made valuable points, and were very germane to the debate. I am open to correction, but I understand that you were the one who introduced the change—[Interruption.] Well, your predecessor. among his many other mistakes—

Mr. Speaker: Order. That is unworthy of the hon. Gentleman. I have introduced no new principle. I ask the House to consider the implications of every comment from a sedentary position being recorded in Hansard, because after all, what would then be the point of making a speech?

Mr. Faulds: Further to that point of order, Mr. Speaker. If I could finish—

Mr. Benn: Further to that point of order, Mr. Speaker—

Mr. Faulds: If I could finish my point, I shoulc be grateful. I am simply backing the good advice given by my right hon. Friend the Member for Chesterfield (Mr. Benn), that perhaps this matter should be considered further, and we should revert to the earlier practice.

Mr. Julian Amery: Further to the point of order, Mr. Speaker. Loth as I am to come to the support of the right hon. Member for Chesterfield (Mr. Benn), filial piety obliges me to say that when, in 1939, my father said "Speak for England" in Arthur Greenwood's speech, he did so from a sedentary position, and it is recorded.

Mr. Benn: Further to that point of order, Mr. Speaker. The right hon. Member for Brighton, Pavilion (Mr. Amery) has cited a famous example of a comment from a sedentary position, which became a historic phrase, quoted around the world. If I may say so, with great respect, Mr. Speaker, I am not asking that that practice should be changed, but that the practice remain unchanged. I was concerned to hear you say that you are sure that the House would not wish to find the record punctuated by such remarks. If sedentary remarks are undesirable, they should be dealt with as they are, by the discipline that is vested in you, Mr. Speaker, not by deleting them from Hansard.
I beg you to take seriously the points that I am making. We are preparing and publishing records for future generations, who will want to get the flavour of the House as well as the words that have been cleared by the Clerks.

Sir John Biggs-Davison: rose

Mr. Robert Atkins: What did your old man say?

Mr. Speaker: Order. This is quite an important matter. I frequently do not hear remarks made from a sedentary position, and I did not hear that one.

Sir John Biggs-Davison: In support of what you have just said, Mr. Speaker, and with reference to what my right hon. Friend the Member for Brighton, Pavilion (Mr. Amery) said about the famous appeal by his father to a right hon. Member of the Labour party to speak for England, if you will refer to the official record of that day in 1939 you will not find it. Those words went round the world by virtue of the newspaper press, but because they were uttered from a sedentary position they were not reported in Hansard.

Mr. Speaker: That is perhaps the fact, but let me clear this matter. I think that the whole House would wish me to do that. Sedentary comments that add to the flavour of the debate are one thing. Constant sedentary comments that are designed to interrupt someone who is on his feet do not add to the debate. That was the point that I was trying to make yesterday and not in any way altering the traditional rules, which I have now affirmed.

Business of the House

Mr. Neil Kinnock: May I ask the Leader of the House to state the business for next week—and the Hansard for 1939?

The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 19 MAY—Progress on remaining stages of the Social Security Bill (1st Allotted Day).
TUESDAY 20 MAY—Completion of remaining stages of the Social Security Bill (2nd Allotted Day).
There will be a debate to approve the first report from the Privileges Committee 1985–86 (House of Commons Paper No. 376).
WEDNESDAY 21 MAY—Until about seven o'clock, Second Reading of the Legal Aid (Scotland) Bill [Lords] followed by a debate on a motion to take note of the situation in the shipbuilding industry.
Motion relatng to the Town and Country Planning (NIREX) Special Development Order.
THURSDAY 22 MAY—Second Reading of the Sex Discrimination Bill [Lords].
FRIDAY 23 MAY—Debates on the motion for the Adjournment.

Mr. Kinnock: First, may I welcome the fact that Ministers responded to demands made by right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and myself yesterday and conceded an emergency debate on the crisis in the merchant shipbuilding industry. Even at this late stage, however, I wonder whether the right hon. Gentleman could arrange a different time for the debate next week so that it takes place earlier in the week and, indeed, earlier in the day. There is great interest in the country generally and great anxiety in the shipbuilding areas about this issue and, therefore, great urgency should be attached to the debate.
Today, another rise in unemployment has been recorded, yet the Government still refuse to come to the House to defend their policies, which have brought about this inexorable rise. I have been asking the right hon. Gentleman for some time to arrange such a debate. Semidetached though he may currently be, I am sure that he has enough of a relationship with the Government to assure us that, in the near future, there could be a debate on unemployment in Government time. I hope that that is the case.
Mr. Gorbachev's views expressed last night add further to the need for a wide-ranging foreign affairs debate, preferably a two-day debate. Will the right hon. Gentleman arrange for such a debate as soon as possible after the House reconvenes on 3 June?
We regret that only three hours is to be given to the Second Reading of the Legal Aid (Scotland) Bill. Could not the right hon. Gentleman postpone the Second Reading of the Sex Discrimination Bill on Thursday so that the Scottish legislation could receive longer consideration on that day in its place?
May I remind the right hon. Gentleman of the need for debates on the arts and conservation policy and urge him to ensure that time is quickly provided?
Will the right hon. Gentleman also ensure that we have a debate upon manning in the Metropolitan police,

especially in the light of today's news that the increase in officers sought by Sir Kenneth Newman is not to be met, despite the Prime Minister's undertaking at the Conservative party conference last year that
Should the police need more men, more equipment. they shall have them.
Finally, in view of the disputes this week, will the right hon. Gentleman arrange for a debate in the near future on the resource allocation working party and its operation in the National Health Service? Such a debate is necessary so that Conservative Members who represent London, excluding the right hon. Member for Finchley (Mrs. Thatcher), can give a proper airing to the view that they have expressed in a letter to the Prime Minister that the Government are selling London short in health terms.

Mr. Biffen: May I respond to the points made by the Leader of the Opposition in reverse order?
I am sure that a debate on the allocation of resources in the NHS would command general interest and would also give the Government the opportunity to deploy their formidable case in that area. But at the moment, as the right hon. Gentleman will know, the pressure on the time of the House intensifies as we approach the end of July. However, that is a matter that we can consider.
I shall, of course, refer the points about the Metropolitan police to my right hon. Friend the Secretary of State for the Home Department.
I note the interest in debates on the arts and conservation, and doubtless that can feature in discussions through the usual channels.
I take account of the request that more time should be made available for the Legal Aid (Scotland) Bill, but again that is something that can best be pursued through the usual channels.
I agree that there will be great merit in arranging a debate upon foreign affairs as soon as reasonably practical and convenient after—

Mr. George Foulkes: The right hon. Gentleman says that every time.

Mr. Biffen: Of course I say it every time. It is the best thing that I have to say. The hon. Gentleman will not ultimately be disappointed in this matter.
I note the request for a debate on unemployment. It can be attended to through the usual channels.
I am happy that it was recognised that the Government fully identify the shipbuilding industry as being a matter of major industrial and current political concern. I am grateful that there is recognition of that in the debate that we have arranged. I note it is thought not to be of maximum convenience, but perhaps that is also something that we can look at through the usual channels.

Mr. Terence Higgins: With reference to Tuesday's important debate on the Privileges Select Committee report, has my right hon. Friend seen the inaccurate and misleading letter written to hon. Members by members of the parliamentary Lobby journalists which referred throughout to the leaking of a Select Committee report when in fact it was the leak of a draft chairman's report? As the coverage of this matter in the press has perhaps been less than balanced, will my right hon. Friend urge right hon. and hon. Members to read the full report and the evidence before taking a view on the matter?

Mr. Biffen: I have seen the letter, and, indeed, I suspect, most Members of the House have had that


advantage. My right hon. Friend makes a pertinent commentary upon it, and it will be to the great advantage of the House if it has a chance to take account of those views.

Mr. David Alton: In view of the decision of the Central Electricity Generating Board not to publish the board of inquiry report into Hinkley Point, and in view of the decision of the nuclear inspectorate not to publish the 20-year inquiry report into the Magnox reactors, will the Leader of the House arrange for the Secretary of State for Energy to make a statement on both of those matters next week?

Mr. Biffen: I note the hon. Gentleman's request. Although we have recently had a wide-ranging debate on that topic, I shall certainly draw his remarks to the attention of my right hon. Friend the Secretary of State for Energy.

Mr. Robert Atkins: Is my right hon. Friend aware that information has recently come to light to suggest that the person who proposed the motion, subsequently taken up by the National Union of Journalists, to send condolences to President Gaddafi of Libya is a gentleman of Iraqi origin who is the head of the Libyan news agency, Jana, in London? He came to this country in 1978 as a political refugee, and was subsequently granted political asylum. Is not the fact that the NUJ paid attention to such an individual a shaming indictment of the activities of its leadership? Is it not about time that it apologised to the British public for its extraordinary antics?

Mr. Biffen: I suspect that very few hon. Members knew about that information, but it represents an interesting commentary on that resolution, and I am sure that there will be interest in the NUJ's reaction to it.

Mr. James Callaghan: May I reinforce the request of my right hon. Friend the Leader of the Opposition that the Government might reconsider the time that they have kindly given for a debate on the shipbuilding industry? Will the Leader of the House bear in mind that the fortunes of the shipping industry and the Royal Navy are bound up in the shipbuilding industry? Will he therefore consider giving a full day's consideration to that most important subject?

Mr. Biffen: I note what the right hon. Gentleman says, and I have no doubt that that, too, will be assessed by the usual channels.

Sir John Biggs-Davison: Is my right hon. Friend aware that I shall not trouble him today about the early-day motion concerning the miscarriage of justice in the Maguire case?
[That this House notes the widespread concern felt in Parliament by eminent scientists, by other responsible observers and by members of the public who have viewed programmes on the matter screened by Channel 4, that Anne Maguire, Patrick Maguire (senior), Vincent Maguire (then aged 17), Patrick Maguire (then aged 14), Sean Smyth, Patrick O'Neill and the late Giuseppe Conlon, sentenced in 1976 to long terms of imprisonment since served, now appear, despite confirmation of their convictions at the time by the Court of Appeal, to have been entirely innocent of the crime with which they were charged; further notes at the conclusion of a debate in the other place on 17th May 1975, the recognition by the

Parliamentary Under Secretary at the Home Office of the strength of feeling on this twitter in that House and his pledge to draw the attention of the Secretary of State for the Home Department to what had been said: and therefore earnestly urges the Secretary of State for the Home Department in the interests of the highest standards of British justice of which this country needs to feel rightly proud, to move without delay for a review of these convictions, either under the provisions of section 17 of the Criminal Appeal Act 1968, or by such other public process of review as he may deem appropriate to this disturbing case.]
Instead, may I ask my right hon. Friend to recall the regret that he shared with me at the displacement of the Whitsun holiday by the spring holiday? Should not the House set a better example and not sit on a Whit Monday, thereby downgrading the birthday of the Christian Church?

Mr. Biffen: I think that I can just about recognise the outlines of a banana skin in my hon. Friend's final observation. I should like to give further thought to his well-intentioned observation. While reminiscing, I should point out that I did not immediately answer the Leader of the Opposition's question. But, in my judgment, my hon. Friend is absolutely right about how Hansard treated the remarks of Leo Amery.

Mr. Jack Ashley: Is the right hon. Gentleman aware that he did not sound very convincing when he said that he would welcome a debate on the under-funding of the NHS, because he then pleaded shortage of time? Does he realise that a debate would not simply involve London versus the rest? From our experience in north Staffordshire, we know that it simply is not true that other areas prosper while London declines. In north Staffordshire we have had red alerts every week bar one throughout the winter. London has had just one week of red alerts.

Mr. Biffen: Of course I appreciate that any debate on the NHS would be truncated if it referred merely to the health services in the London area. But I would have to accommodate such a debate within the discipline of all the other demands that are made on parliamentary time as we approach a period of peak demand.

Mr. Bob Clay: Will the right hon. Gentleman ask the Secretary of State for Trade and Industry to come to the House at the earliest opportunity to explain something that he said yesterday, during questions on the statement on British Shipbuilders? He said:
If an adequate number of orders can be found to keep those yards open, that will be highly desirable and something that I would welcome. "—[Official Report, 14 May, 1986; Vol. 97, c. 716.]
Two hours before he said that, British Shipbuilders told the trade unions in Newcastle that, whatever orders were found, those yards would close and that the redundancies announced would go ahead. That has been checked and confirmed again this morning.
Does the Secretary of State know what is going on? Did he knowingly mislead the House? Who is in charge—the Secretary of State or British Shipbuilders, which seems hell-bent on running down the industry whether or not it obtains orders? Will the Secretary of State come to the House, because the matter cannot wait until the debate


next week? People who are being made redundant and whose yards are threatened with closure want to know what is happening.

Mr. Biffen: The hon. Gentleman made a number of generalised accusations, including one against the good name of my right hon. Friend the Secretary of State for Trade and Industry. I reject any accusation of ill faith against my right hon. Friend.
The hon. Gentleman asked me to refer his remarks to my right hon. Friend, and of course I shall do so.

Sir Anthony Grant: Is it possible at some time to have a debate on constitutional matters during which we could perhaps discuss hung Parliaments and coalition Parliaments, among other things? In particular, the House could take note of the fact that people in Cambridgeshire and elsewhere who have experienced the horrors of a Lib-Lab coalition detested what they saw and decisively rejected it.

Mr. Biffen: The prospect of a convincing Conservative majority after the next election should lift from my hon. Friend all those agonies. Of course, I undertake to consider an interesting constitutional innovation, not least because it would be helpful if the Opposition parties, especially the Liberal and Social Democratic parties, were to be a little more forthcoming about how they would react to the situation outlined by my hon. Friend.

Mr. Robert Kilroy-Silk: Will the Leader of the House try to be a little more sympathetic to and forthcoming about the request of my right hon. Friend the Leader of the Opposition for an early debate on unemployment? Would it not be appropriate, on the day on which record unemployment figures have been announced, for the right hon. Gentleman to say that there will be an early opportunity to discuss the increasing and horrendous levels of unemployment on Merseyside, and in particular the recent redundancies in Kirby in my constituency? Is it not time that my constituents were given some semblance of an idea of what prospects the Government hold out of them ever having permanent, full-time employment?

Mr. Biffen: I think that I responded in a prudent and realistic manner to the Leader of the Opposition, and I would hope that he would feel that it was a reasonable answer.

Mr. Douglas Hogg: Will my right hon. Friend ensure that next Wednesday's debate on the NIREX special development order is at least a three-hour debate? I recognise that he is under no great pressure in that the Labour party is committed to this policy and the Liberal party chief whip has endorsed burial of nuclear waste in surface facilities—but I am not and do not. My constituents and those in related constituencies insist on having our case fully put, and one and a half hours is an insufficient time in which to do so.

Mr. Biffen: I take note of my hon. Friend's remarks. I think that the question of timing might reasonably be considered through the usual channels.

Mr. Willie W. Hamilton: In view of the widespread interest in Scotland in the Legal Aid (Scotland) Bill, will the right hon. Gentleman sympathetically consider

the request by my right hon. Friend the Leader of the Opposition for further time to discuss that very important matter?

Mr. Biffen: I do not think that I can go beyond the reply that I gave to the Leader of the Opposition, but I have of course, noted the hon. Gentleman's remarks.

Mr. John Wilkinson (Ruislip-Northwood): Will my right hon. Friend bring forward to the earliest possible date the debate on the defence Estimates, because defence spending in real terms is to go down by 6 per cent. and there is also an urgent need for an expanded naval shipbuilding programme for strategic as well as good industrial and social reasons?

Mr. Biffen: I understand my hon. Friend's point. I am sure that he will realise that there is much merit in having the report of the Select Committee available before the debate takes place.

Mr. David Clelland: May I press the right hon. Gentleman once again on the need for an early debate on the funding of the NHS? Is he aware that the Prime Minister, on more than one occasion this week, has implied that the north of England is better off as a result of a reallocation of NHS resources?
Is the right hon. Gentleman aware that, despite that, the Newcastle district health authority has reported that there is no possibility of meeting its budget in either the short or the long term without ward closures? That has resulted in a proposal to close the Fleming memorial hospital, which for almost 100 years has provided highly specialised services for children.
The Prime Minister said that the north is better off. Will she explain that to those who rightly ask how, given that disastrous set of circumstances, the north can possibly be better off? Can there be an early debate so that the matter may be clarified?

Mr. Biffen: I am sure that the hon. Gentleman would not think it an unfair comment if I said that he has just presented a miniature speech rather than a request. However, I notice that it did include a request.
The Government have such a formidable case on the provision of hospital building and health services that we would be happy to have a debate, but its timing must be considered through the usual channels.

Mr. James Hill: At the Venice meeting of the Western European Union the Council of Ministers was reluctant to envisage any progress in the reactivation of WEU. Does my right hon. Friend agree that that should be the subject of debate in the Chamber as the WEU is the second layer to NATO?

Mr. Biffen: I understand my hon. Friend's attachment to the WEU. Indeed, the House has a long and enduring relationship with that body. The best that I can do in the first instance is to refer my hon. Friend's comments to my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs.

Mr. Nigel Spearing: Can the Leader of the House confirm that there will be only a single motion for the debate on the Privileges Committee report on Tuesday? As privilege is widely misunderstood—and not only outside the House—and as the recommendation links the alleged breach of privilege with a specific


penalty, would it not be better for the House to take the alleged breach of privilege and the proposed penalty as separate questions?

Mr. Biffen: The motion has already been tabled and has appeared on the Order Paper for, I think, at least two days. Any other arrangements must be within the gift of the Chair.

Mr. David Harris: My question also relates to next Tuesday's debate on privilege. Given the importance of this matter both to journalists who work in this place and to hon. Members, can my right hon. Friend assure us that the debate will be taken at a reasonable time—perhaps 10 o'clock, and no later—and that there will be plenty of time to deal with matter?

Mr. Biffen: My hon. Friend makes a fair point. I think that the business that I have announced gives a clear indication of when we expect the debate to get under way. I take this opportunity to say that I hope that the length of the dabate will be broadly similar to that when The Economist issue was debated.

Mr. Jeremy Corbyn: Has the Leader of the House had an opportunity to study early-day motion No. 851 concerning the nuclear threat to Salisbury Plain occasioned by cruise missiles touring around Salisbury Plain last weekend?
[That this House notes that over the weekend period of 7th to 12th May a large convoy of military vehicles accompanied a cruise missile launcher around Salisbury Plain; regrets the danger to local people of this convoy; is appalled that roads around Tilshead were closed to prevent the public seeing the missiles; further regrets that a United States Army vehicle carrying messages to the convoy crashed in the churchyard fence at Tilshead Parish Church but congratulates those who were able to write peace signs on its side windows; and finally recognises that cruise missiles are not wanted in the United Kingdom.]
Does the right hon. Gentleman think that, in view of the denial of civil liberties to the people of that area through road closures, police presence and harassment and the sheer inefficiency of clogging roads with military vehicles for several days, the Secretary of State for Defence should come to the House and explain what the danger is to people in that area and the rest of the country rom those missiles touring around? Should not the Secretary of State also tell the House what he proposes to do to protect the people of that area from the massive police presence that seems to occasion American missiles every time they are let loose on our roads?

Mr. Biffen: I do not accept the hon. Gentleman's strictures on either the armed forces or the police. I shall, of course, draw the attention of my right hon. Friend the Secretary of State for Defence to the anxieties that the hon. Gentleman has expressed.

Mr. Michael Latham: Does my right hon. Friend realise that the Building Societies Bill completed its Committee stage at the end of February, yet we still await its Report stage? As this is an important and, indeed, growing part of the Government's housing policy, will my right hon. Friend please bring the Bill forward for Report as quickly as possible?

Mr. Biffen: I take note of what my hon. Friend has said. I know only too well the significance of the Bill for

the building industry generally. As my hon. Friend can see, it does not feature in the business for next week, but I hope that it will not be too long delayed.

Mr. Ian Wrigglesworth: Will the Leader of the House give us an assurance that the debate on shipbuilding next week will be wide-ranging? Is he aware that the closure of Smith's Dock on Teesside, adding to the already record levels of unemployment in Cleveland, has been a devastating blow to the entire community? Will he provide an opportunity for Ministers from the Department of the Environment, the Department of Employment and other Departments who should be involved in the solutions to these problems to respond to the issues raised in the debate?

Mr. Biffen: I shall ensure that the hon. Gentleman's remarks are borne in mind by those who will draft the motion. The Ministers who will take part in the debate will be so drawn as to enable the debate to be dealt with in the broadest sense.

Sir Kenneth Lewis: May I support my hon. Friend the Member for Grantham (Mr. Hogg) in asking for increased time for the debate on nuclear waste that is to take place on Wednesday? Many Members have an interest in the matter and many will wish to contribute to the debate. After the Minister has spoken. there will not be much time left for Back Benchers. I believe that the debate should be given added mileage.

Mr. Douglas Hogg: Well done.

Mr. Biffen: I understand the point that has been made by my hon. Friend the Member for Stamford and Spalding (Sir K. Lewis), and elaborated on from a sedentary position by my hon. Friend the Member for Grantham (Mr. Hogg). Were it not for these remarks, "Speak for England" would have to rely on the Press Gallery.

Mr. Frank Cook: The Leader of the House will know that some weeks ago the Government published a report on irradiated food and its suitability or otherwise for the populace. He should know that representations have to be submitted by the end of July, and he should know also that the Minister responsible for these matters has refused to give me information which I consider it essential to have in my possession for any representations that I may make in response to the report. Will he tell me how, through the procedures of the House, I can get information which I consider to be essential?

Mr. Biffen: In the first instance, the hon. Gentleman might like to ventilate the matter in an Adjournment debate. The Minister would then be able to deal fully with the issues concerned in public view, as it were.

Mr. Hugh Dykes: Will my right hon. Friend the Leader of the House consider again the importance of having an economic debate, if not next week, then perhaps after the recess, not least because it would relate to some of the implications of his remarks which were made last Sunday on television, and because when we consider our position among OECD countries the alarming reality is hitting us more and more that we are the least investing country among the large and advanced economies, so called? Our rate of asset reinvestment is about one fifth of that which Japan is achieving, and its GNP is already much greater than ours. This is becoming a serious matter, not least for the unemployed.

Mr. Biffen: Today's unemployment figures clearly add to the general interest in economic affairs. I think that my hon. Friend will agree that the House has fairly frequent opportunities of debating economic matters, but I shall bear his request in mind. He will have heard that there are many other requests for debates against which his request will have to be taken.

Mr. Greville Janner: Will the Leader of the House reconsider his reply to me last week and his refusal to arrange for a debate, statement or inquiry into the murders and disappearance of British servicemen after their interrogation by German Army Group E—Kurt Waldheim being in charge of the interrogation—especially in the light of documentary evidence that is now available of British soldiers being sent for special treatment according to the Fuhrer's order—in other words, for their elimination? Surely this is a matter which the Government cannot turn aside by saying that it has nothing to do with them.

Mr. Biffen: The hon. and learned Gentleman has written to me on these matters and I have replied to him today.

Mr. Peter Bruinvels: Is my right hon. Friend the Leader of the House aware of an apparent flaw in the Surrogacy Arrangements Act 1985 whereby ladies entering into surrogacy arrangement contracts are being paid to keep a diary, such arrangements being contrary to the spirit of the Act? May we have an opportunity to debate that and the lack of provision currently for religious education in our schools? Many schools are offering peace studies rather than true religious education.

Mr. Biffen: I am sure that the issue raised by my hon. Friend would make the subject of a lively and constructive debate. I must ask him, however, to observe the demands for debates on a wide range of topics which have been made this afternoon. It would be misleading if I said that one could be arranged at an early date.

Mr. Allan Roberts: Is the Leader of the House aware that two and three quarter hours to discuss the special development order for the NIREX disposal site is entirely inadequate? Conservative Members who support the nuclear industry but do not want it in their back yard will wish to speak. Secondly, it will take two and three quarter hours for the alliance to explain how it agrees with the Labour party when it is in favour of an independent nuclear deterrent, which means that it is necessary to produce plutonium, which in turn makes it necessary to have reprocessing. The alliance is in favour of getting rid of Sellafield, but it would have to keep it to produce plutonium for the independent nuclear deterrent. Why was the alliance established, and why did members of the SDP leave the Labour party? Are they all unilateralists now?

Mr. Biffen: If all those matters really are the consequence of a special development order of the Department of the Environment, I understand why there is a request for more time. As I have said, the matter can be considered through the usual channels.

Mr. David Madel: Has my right hon. Friend noticed that wage negotiations in the electricity supply industry have broken down, with a threatened overtime ban on 25 May? As it is essential for

the well-being of the nation that there is industrial peace in the electricity supply industry, will the Government arrange for a statement to be made next week to explain how they hope to help the management and unions out of their present difficulties?

Mr. Biffen: I do not think that anyone in the House will underestimate the serious implications of industrial action in the electricity supply industry. I am sure that everyone will wish the House to act in the most constructive way possible to secure an early resolution of the dispute. I shall refer my hon. Friend's remarks to my right hon. Friend the Secretary of State on when it might be appropriate to make a statement.

Mr. Leo Abse: May I again draw the attention of the Leader of the House to the early-day motion standing in my name, which has been signed by 101 Members, relating to family courts?
[That this House welcomes the establishment of the Family Courts Campaign to promote the early implementation of family courts, following the support for family courts recently expressed by the Law Society, the Association of County Councils, the Association of Directors of Social Services and many other bodies; welcomes the recommendations of the report of the Matrimonial Causes Procedure Committee, particularly those relating to the establishment of conciliation in matrimonial proceedings; notes with concern that the report of the Law Commission on Family Law, Illegitimacy, has yet to be implemented: further notes that the joint study set up in July 1984 by the Lord Chancellor and the Secretary of State for the Home Department to reexamine the idea of a unified family court, and study the resources implications in terms of finance, manpower and accommodation is due to be published shortly; regrets that this study has been so long delayed; and urges the Lord Chancellor and the Secretary of State for the Home Department to come forward with proposals for legislation at the earliest opportunity, following the publication of their report and their subsequent consultation on the most appropriate model for implementation.]
Bearing in mind the legitimate anxiety expressed yesterday by HRH Princess Margaret and the widespread belief—I do not know why the right hon. Gentleman is smiling—that there is a need for a genuine family court if we are to deal with the problems of child abuse and child neglect, will he provide an opportunity for a debate during which we shall be able to discuss the arid and legalistic report that was issued this week—as arid and legalistic as is The Times editorial this morning—and reflect public opinion, thereby showing the wide gap on this issue between the legalistic bureaucrats in the Lord Chancellor's Department and the Treasury and the House?

Mr. Biffen: The smile that crossed my face was one of appreciation and admiration of the skill with which the hon. Gentleman develops his argument and his case, which from now onwards will have "By Royal Appointment" stamped well and truly upon it. I shall consider his request for a debate, but he will know the difficulties that face me. I appreciate that the issue which he has raised has a real House of Commons interest.

Mr. Harry Greenway: Will my right hon. Friend make arrangements for an early debate on the most important Audit Commission report on education,


which calls for the closure of 1,000 comprehensive schools over the next few years and the consequent redundancy of 5,000 teachers per year in addition to natural wastage, as well as making the valuable suggestion that there should he better payment of extra good teachers? This is a crucial report for the country generally and for the education service especially. I should be grateful if my right hon. Friend would arrange an early and wide-ranging debate upon it.

Mr. Biffen: I cannot in all conscience promise that there is the prospect of an early and wide-ranging debate on the report. I shall draw the remarks of my hon. Friend to the attention of my right hon. Friend the Secretary of State for Education and Science. I know that there will be genuine public interest in any proposal which involves such massive school closures.

Mrs. Renée Short: May I reinforce the argument of my hon. and, in view of his recent activity perhaps I should say learned, Friend the Member for Torfaen (Mr. Abse) about the need to debate a family court structure? I remind the Leader of the House that the Select Committee, in its report on the care of children, made a strong recommendation in recommendation 36 that this issue could he examined. In view of the time that has been taken by the Lord Chancellor, does not the right hon. Gentleman think that it is high time to debate the issue in the House so that hon. Members can give guidance to the Government on what they feel should be introduced?

Mr. Biffen: I understand the point that the hon. Lady has made. She brought to the argument the authority of the Chairman of the appropriate departmental Select Committee. I do not think that I can go beyond what I said earlier.

Mr. Michael Brown: I reinforce the request that has been made by other hon. Members. I am grateful to my right hon. Friend the Leader of the House who said that he will consider the matter through the usual channels. If he uses the usual channels for that purpose—bearing in mind that, during the recent debate on nuclear policy the Labour party and the Liberal party clearly acknowledged that they would go along with the special development order—he might receive the wrong answer. How will he use the usual channels for the request? Hon. Members are involved at a constituency level.

Mr. Biffen: I note charitably what my hon. Friend has said. but I think that he should be a little cautious before trying to elevate himself into a usual channel—it is not that great a life.

Mr. David Penhaligon: Is the Leader of the House aware that yesterday the Minister of State, Department of Trade and Industry informed Cornish Members that a final decision on at least one tin mine would be made in the first week of June? Does that mean that we cannot have a debate in the House before the final decision is made? Although we understand why we are having a debate next week about shipbuilding, will the Leader of the House explain to those who live in Cornwall why not one moment has been found in the past six months to discuss the tin industry?

Mr. Biffen: The matter has been considered by a departmental Select Committee. Its report and the

Government's reactions to it ought to be a precondition for a debate. I take account of what the hon. Gentleman has said. I realise only too well that the matter is of immense significance in the Duchy.

Mr. Edward Leigh: My right hon. Friend may recall a debate some weeks ago initiated by my hon. Friend the Member for Grantham (Mr. Hogg) on the Nuclear Industry Radioactive Waste Executive order. Because of a brilliant but somewhat lengthy speech by my right hon. Friend the Member for Castle Point (Sir B. Braille), I was unable to speak. As I and some of my hon. Friends intend to vote against the order, it is vital that we are given an opportunity to speak. Therefore, I earnestly request the Leader of the House to allow a three or four-hour debate.

Mr. Biffen: I will convey to my right hon. Friend the Patronage Secretary the fact that my hon. Friend intends to vote against the Government. I will also take account of the fact that he seeks an extended time for the debate.

Mr. Allen McKay: Does the Leader of the House consider that, in view of the obvious unease and disquiet about the problems that have occurred in the nuclear industry, it is time that we had a debate on the coal mining industry before we run into the 1960s danger of wasting millions of pounds investment? As the Government wish to turn the coal mining industry into a market situation, and as we are waving goodbye to the old chairman and welcoming the new chairman, does the Leader of the House agree that this is an appropriate time to state the House's position on an overall energy policy based on what we know is a safe fuel—coal?

Mr. Biffen: I said earlier that the hon. Gentleman made a persuasive case for the coal industry even though his remarks were, by necessity, somewhat brief. I cannot promise the prospect of an early debate on the coal industry, for reasons that have been apparent this afternoon. Many demands are being made on Government time. That does not in any sense diminish the importance of the point that the hon. Gentleman has made. I will see that it is conveyed to my right hon. Friend the Secretary of State for Energy.

Mr. Richard Hickmet: I refer to the request for a debate on NIREX and the special development order. The issue involved has caused great concern to the three or four parties that are affected. More than 120·000 people have signed a petition in Humberside, principally in south Humberside. I understand that the petition will be presented to the House of Commons on Wednesday. County councils, borough councils and district councils have had numerous public meetings which were attended by all my local hon. Friends who have spoken this afternoon. I strenuously urge my right hon. Friend to allow the debate to take place over three or four hours. The arguments against the NIREX proposals will be advanced only by Conservative Members. My right hon. Friend knows that they will not be advanced by the Opposition, because the hon. Member for Copeland (Dr. Cunningham) has already given his view that a shallow—based disposal facility is satisfactory. Unless a three-hour debate is granted, the issues will not be satisfactorily canvassed by those hon. Members who are affected.

Mr. Biffen: I have said that the matter can be consiered further through the usual channels. I assure my hon. Friend that I shall make certain that his views are considered.

Mr. Tam Dalyell: I ask the Leader of the House a question of which I gave him notice for a considered reply. In view of Roger Todd's well-researched article on the sinking of the Sheffield in the Daily Mirror, has the time come for discussion of the major minority report of the Select Committee on Foreign Affairs on the events of 1 and 2 May 1982?

Mr. Biffen: I am grateful to the hon. Gentleman who, with characteristic courtesy, informed me that he would raise the question. I will consider further the possibility of a debate on the Select Committee's report. It can be discussed through the usual channels.

Mr. John Browne: Does my right hon. Friend accept that, on remarriage, a war widow loses for ever her entitlement to a war widow's pension, and that on the death of any subsequent husband she cannot claim it with effect from that day? Is it not time that we had a debate on the subject of war widow's pensions so that we can discuss not only the level but the mechanics of entitlement that make the payment fairer, because at the moment widows are discouraged from remarrying?

Mr. Biffen: I agree entirely with what my hon. Friend has said. He has been a most effective campaigner for war widows. He is more likely to bring the matter to the Floor of the House through the technique of an Adjournment debate than a general debate because, quite frankly, I do not think that there is time available.

Mr. Doug Hoyle: Does the right hon. Gentleman recall that on 27 March I drew his attention to early-day motions 204 and 217?
[That this House notes with concern that speech therapists, members of a highly-skilled caring profession, discharging a wide range of responsibilities, are underpaid in comparison with other National Health Service professionals doing work of equal value; notes also that speech therapy is traditionally a female profession; and calls upon Her Majesty's Government to provide sufficient funds to enable speech therapists' salary levels to be increased so that speech therapists receive equal pay for work of equal value.]
[That this House expresses its appreciation of the valuable work performed by speech therapists; and, in expressing its concern that decreasing comparative salary levels will dissuade the ablest of individuals from entering this profession, calls upon Her Majesty's Government to ensure that speech therapists are remunerated at a level equal to that of other graduate specialists within the National Health Service.]
The motions were signed by 119 and 87 hon. Members, respectively, on both sides of the House. At that time I told the right hon. Gentleman that there was a demand for a statement to be made by his right hon. Friend the Secretary of State for Social Services. The Leader of the House, in his usual courteous and balanced way, said that he would draw the attention of his right hon. Friend to the demand. What has been the result of his representations?

Mr. Biffen: I think that I must have notice of that question.

Mr. Richard Holt: I reinforce the views of my hon. Friend the Member for Ealing, North (Mr.

Greenway) in his request for a debate on education. Yesterday, Smith's Dock in Langbaurgh was closed and, for the second time in three years, an axe is hanging over schools in my constituency. It was reported today that a further 1,000 schools are liable to close in future. That cannot help young people in my constituency who saw their jobs disappearing yesterday and are seeing their schools disappearing today.

Mr. Biffen: My hon. Friend rightly alerts the House to what will be a general anxiety about a report which contains massive school closure proposals. However, they are just proposals from an advisory body. More generally, I refer him to the answer I gave earlier to my hon. Friend the Member for Ealing, North (Mr. Greenway).

Mr. John Ryman: Last week I asked the Leader of the House a question about regional aid and the Government's policy, especially on the north-east region. The Leader of the House gave a reply which, unwittingly, was slightly helpful. Given the niggardly amount that the Government gave the north-east by way of regional aid, will he take whatever steps are necessary to ensure that the distribution of regional aid is efficient and quick?
Is the right hon. Gentleman aware that a company in my constituency, Laceintel Ltd, has applied for regional aid which is desperately required to pay for industrial machinery and has to be paid by the end of next week? Unless the application is considered and granted by the end of next week, 55 jobs will be in jeopardy. Will the right hon. Gentleman have a word with the Secretary of State for Trade and Industry about the matter and see whether he can expedite the consideration of the application?

Mr. Biffen: I shall certainly refer the problems outlined by the hon. Gentleman to my right hon. Friend the Secretary of State for Trade and Industry.

Mr. Ray Powell: Is the right hon. Gentleman aware of early-day motion 845 in the name of my right hon. and hon. Friends?
[That this House regards with astonishment the refusal of the Secretary of State for Wales to meet Ogwr Borough Council about the critical job losses it has suffered, and about the need to restore development area status, the case for which was fuelled by the crisis created by the Ford announcement; regards this grave discourtesy to a major Welsh council as breaking the traditional availability of the Welsh Office Ministers to Members of Parliament and to the councils; and warns the Secretary of State that though he has slammed the Welsh Office doors in the face of the people of Wales he cannot hide indefinitely behind those doors from the wrath of the very people whose interests he should represent and champion.]
It concerns the refusal of the Secretary of State for Wales to meet Ogwr borough council to discuss the downgrading of development area status. If the right hon. Gentleman is not prepared to allow a debate next week on this vital issue, will he raise the matter in Cabinet to highlight the arrogance that is rubbing off the Prime Minister on to the Secretary of State for Wales? The Secretary of State will not meet the borough council. On Tuesday afternoon, 50 Ogwr borough councillors attended the House of Commons for the purpose of meeting the Prime Minister, the Secretary of State, or any other Tory Member of Parliament, yet not one of those invited turned up.

Mr. Biffen: I totally reject the hon. Gentleman's personal imputations against the character and behaviour of my right hon. Friends the Prime Minister and the Secretary of State for Wales. I do not believe that my right hon. Friend the Secretary of State has acted in this matter with any discourtesy. I cannot accept the hon. Gentleman's strictures.

Mr. Tony Lloyd: The right hon. Gentleman will be aware, even if he does not share the concern of many people, of the failure of the Department of the Environment and the Scottish Office to publish adequate information on radiation levels during the Chernobyl incident. Is he aware that my hon. Friend the Member for Fife, Central (Mr. Hamilton) asked in a written question about maximum radiation levels which was answered in yesterday's Hansard? In that written answer, the Department of the Environment failed to do more than give details of average levels of radiation. Of course, those details are totally useless. Do the Government intend withholding information, or will the right hon. Gentleman ensure that Members of Parliament have access to such information?

Mr. Biffen: My right hon. Friends the Secretary of State for the Environment and the Secretary of State for Scotland have acted with great sensitivity and responsibility in this matter. I do not accept that there has been any sort of radiation information cover up. Of course, I shall refer the hon. Gentleman's anxieties to them.

Mr. Robert Parry: Has the Leader of the House seen early-day motion 844, which is supported by hon. Members on both sides of the House about the Charity Shield 1986?
[That this House, appreciating the excellent crowd behaviour, the true sportsmanship and the high standard of entertainment by the Everton and Liverpool football teams at the 1986 Cup Final, calls upon the Minister for Sport to ask the Football Association to allow Everton to participate in the 1986 Charity Shield; notes that Everton were runners-up in the First Division championship and the Challenge Cup and were participants in the 1984 and 1985 Charity Shield with similar excellent crowd behaviour, and rejects the suggestion that a foreign team should replace Everton in this traditional English charity event.]
We are delighted that Everton football club, and not a foreign team, will participate in the matches. Has the right hon. Gentleman seen early-day motion 840, which was tabled by, among others, my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), which concerns the excellent behaviour of the Liverpool and Everton football clubs at the 1986 Football Association cup final?
[That this House congratulates Liverpool Football Club's team under Kenny Dalglish's managership, in winning the 1986 Football Association Cup Final; further congratulates Everton Football Club's team, under Howard Kendall's managership, for their great football and fine team spirit; believes that both teams and their supporters are a real credit to football in the United Kingdom and to the people of the City of Liverpool and Merseyside in particular; notes that the behaviour of the Liverpool and Everton football supporters at Wembley deserve praise from the police, proving that football crowds can be good-humoured and well-behaved and that they need not involve themselves in any form of violence;

and concludes that the way in which almost half a million of the people of Liverpool turned out, Liverpool, Everton and non-club supporters alike, to greet the two dubs on their return to Liverpool, is proof beyond doubt that, despite all the problems of the Merseyside area, the spirit of the people remains good and that they deserve the support of the whole country.]
Will the right hon. Gentleman ask the Minister with responsibility for sport to make representations to the FA to support the re-entry of English teams in European competitions in the 1987–88 season?

Mr. Biffen: Because we all like to get on this bandwagon, I should like to say that I congratulate Merseyside on a good year for football, whatever else has happened.

Mr. Dave Nellist: What about Shrewsbury?

Mr. Biffen: I have not congratulated Shrewsbury. I am showing a shrewd sense of realism. If one lives in Oswestry, one is as likely to look north-west as south-east. I shall, of course. take up the hon. Gentleman's other point with my hon. Friend the Minister with responsibility for sport.

Mr. D. N. Campbell-Savours: Is it not true that someone on the Select Committee on the Environment has lied and, and in doing so, has dropped a journalist in the cart?

Mr. Biffen: I think that that is a point to be made in Tuesday evening's debate.

Mr. Martin J. O'Neill: Does the right hon. Gentleman remember that, two weeks ago, I asked him to put in the Library a copy of the contract for the Trident submarine or to hold a debate on the issue? I in no way doubt the strenuousness of the right hon. Gentleman's efforts to fulfil either or both of those requests, but does not his inability to achieve this show the type of difficulties that the Daily Mirror has had to face in obtaining information about the sinking of the Sheffield? Should not a Defence Minister make a public statement in the House about the serious allegations in today's Daily Mirror about the deaths of 20 service men. if only to comfort the parents and families of those poor men?

Mr. Biffen: The hon. Gentleman has taken up the point raised by the hon. Member for Linlithgow (Mr. Dalyell), although the hon. Gentleman seeks a statement. I shall, of course, refer his request to my right hon. Friend the Secretary of State for Defence.

Mr. Stuart Bell: In a comment which appears now to have been a long time ago, the Leader of the House upheld yesterday's remarks to me by the Secretary of State for Trade and Industry—notably that, if orders from China and Cuba were consummated. Smith's Dock on Teesside and other shipyards would remain open. That is very good news for my constituents who live in Middlesbrough. The information that we are negotiating with Cuba for an order for four vessels is most welcome. Will the right hon. Gentleman draw the attention of the Secretary of State for Trade and Industry to those facts? Will they be included in the debate next week?

Mr. Biffen: I take note of the hon. Gentleman's points. I shall certainly convey his remarks to my right hon. Friend.

Prime Minister's Question Time

Mr. John Stokes (Halesowne and Stourbridge): On a point of order, Mr. Speaker. Earlier this afternoon you made some remarks about the conduct of the House during Prime Minister's Question Time. If I heard you correctly, you said—I am merely paraphrasing—that a certain amount of noise was inevitable in view of our customs and traditions, and that cheering was in order. I think that those remarks will have been heard with dismay by the many hundreds of thousands of those who listen to "Today in Parliament" or "Yesterday in Parliament", who think that already there is far too much noise during Prime Minister's Questions.
Not only foreigners, but English people, cannot understand it when, before the Prime Minister has time to reply to an Opposition question, there is so much shouting on the Opposition Benches that she has to repeat herself two or three times and shout. That happens in no other country or kingdom. Although I am all in favour of rumbustiousness here, surely what happens during Prime Minister's Question Time has gone too far and should be reined in.

Mr. Speaker: As the hon. Member has raised this point, I point out that I was making a distinction between cheering and jeering.

Mr. Neil Kinnock: Further to that point of order, Mr. Speaker. I realise that piety and self-righteousness are not among the attributes of the hon. Member for Halesowen and Stourbridge (Mr. Stokes). He appeared in his last contribution to stray, giving the impression that this side of the House is guilty of conduct that is inclined or intended to drown the contributions of the Prime Minister or of any other hon. Member. If the hon. Government were prepared to acknowledge—I note that he is listening—that this is a general fault, frequently repeated by the Conservative Benches, perhaps we could raise the standards of conduct by Government example.

Mr. Speaker: I subscribe to those views. Prime Minister's answers should generally be heard in greater silence. The point I was trying to make was that the "Hear, hears"—which are, I understand, the true interpretation of "Hear him", or perhaps even "Hear her"—have been traditional in the House for many centuries.

Special Development Order

Mr. Douglas Hogg: On a point of order, Mr. Speaker. I seek your guidance on your powers under Standing Order No. 4. As you will know, from what my right hon. Friend the Leader of the House said, next Wednesday we are to have a debate on the NIREX special development order. You may feel that there is a cosy agreement between the two Front Benches to limit the debate to one and a half hours. This may be because the Labour party, too, supports the policy of disposing of low-level nuclear waste in a shallow burial facility. It is the policy of the Liberal Chief Whip as well.
A number of constituencies are affected, and Fulbeck in my constituency is included. Our constituents would never forgive the House if their case was not fully argued. Under Standing Order No. 4, the debate on a prayer of this type ends automatically at 11.30 pm. As I understand it, Mr. Speaker, you have a residual discretion under the provisions of the Standing Order, if you hold that this is an important matter which has not been adequately discussed, to adjourn the debate for further argument. If the representatives of the affected constituencies—

Mr. Richard Hickmet: And those of neighbouring constituencies.

Mr. Hogg: —and the representatives of neighbouring constituencies—they will be the only ones putting the argument—are not called, will you consider sympathetically an invitation to invoke your residual power to adjourn the debate?

Mr. Speaker: That is a hypothetical question. Of course I shall do that; I always do.

Mr. Michael Brown: Further to that point of order, Mr. Speaker. I am sure you will have noticed the number of requests made to the Leader of the House. It is reasonable to assume that all those hon. Members might seek to catch your eye during that debate. During a one and a half-hour debate, it is reasonable to assume that not all those who this afternoon have made the case for a longer debate will be called, and they will very

much welcome you using your power under the Standing Order referred to by my hon. Friend the Member for Grantham (Mr. Hogg). I urge you to recognise that the debate on Wednesday is the only opportunity that we have to draw to the attention of the House the total and unanimous opposition of large numbers of people in four communities in the United Kingdom.

Mr. Neil Kinnock: Further to that point of order, Mr. Speaker. I was under the impression earlier today that we were to have a three-hour debate on that prayer. I do not know from where I gathered that view. I had to be corrected by my hon. Friend the Chief Whip of the Parliamentary Labour party. If it would assist in any way, may I say that I and my right hon. and hon. Friends are disposed to agree to the prolongation of that debate, as this issue is of considerable importance to both sides of the House. I hope that even without invoking your intervention the Government will reconsider their business. I am sure that a three-hour debate would bring widespread satisfaction.

Mr. Edward Leigh: Further to that point of order, Mr. Speaker. This is an important matter and you are about to give an important ruling. You might at this stage say that you will adjourn the debate, because there are no Members of the Liberal party in the Chamber. They clearly do not care at all about the matter that we are to debate.

Mr. Speaker: That is also a hypothetical question. It may be of some comfort to the hon. Gentleman to know that during the debate I shall certainly bear in mind those who were not called in previous debates.

Spring Adjournment (Debates)

Mr. Speaker: I remind hon. Members that on the motion for the Adjournment of the House on Friday 23 May up to eight hon. Members may raise with Ministers subjects of their own choice. Applications should reach my office by 10 pm on Monday next. A ballot will be held on Tuesday morning and the result will be made known as soon as possible thereafter.

Orders of the Day — Wages Bill

As amended (in the Standing Committee), further considered.

New Clause 1

YOUNG PEOPLE

'Employers of workers under the age of 21 who undertake the same work as adults who are protected by Wages Councils Orders made under Part II of the Act shall pay such workers at least 70 per cent. of the minimum rate laid down in the Order and shall charge no more for accommodation than is allowable for adult workers.'.—[Ms. Clare Short.]

Brought up, and read the First time.

Ms. Clare Short: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Mr. Harold Walker): With this it will be convenient to take the following: New clause2—Disabled workers—
'The provisions of Part II of this Act shall not apply to registered disabled workers.'.
Amendment No. 54, in clause 12, page 12, line 4, at beginning insert—
'With the exception of the special protection provided for registered disabled workers.'.
Amendment No. 58, in clause 12, page 12, line 23, leave out subsection (3).
Amendment No. 81, in clause 13, page 12, line 35, at end insert—
'(aa) the welfare of mentally or physically disabled workers in relation to whom the Wages Council concerned would cease to operate'.

Ms. Short: Today we move on to part II of the Wages Bill. Yesterday we made it clear that part I would lead to many workers, innocent of any offence, facing fines and deductions from their pay and having no adequate remedy to deal with that. It will also force many workers who are currently paid in cash and wish to continue to be paid in that way to move, without negotiation or consultation, to cashless pay. All of that is bad enough. We now move to part II of the Bill, which is much worse.
It is designed to cut the wages of some of Britain's poorest workers. There are about 3 million of them, and all of them will suffer. They are the workers protected by wages councils—special machinery established long ago and supported by all political parties to ensure that some of the poorest workers do not see ever-worsening rates of pay as worse and worse employers move into industry and undermine the pay that decent employers wish to give.
The Government are determined to change the little protection that those workers have. They say that it is necessary to cut the pay of the poorest workers in order to create more jobs. That is not true. If we all took a cut in pay there would be more unemployment and further deflation of the economy. Of course, part of the current problem is that the economy is too deflated already. It is obvious, on all international comparisons, that Britain's wages are very low.
The Government argue that we would compete better internationally if our wages dropped even further, so their argument is that we must compete with some of the poorest

countries in the world paying incredibly low rates. That points us towards a real sweat-shop economy instead of towards the virtuous cycle that we should adopt of high investment, high skill training and high wages.
If the Government believe that thesis—we do not accept that wage cuts will create more jobs—why do they not ask those who can afford it best to accept wage cuts? Since the Government came to power the 20 per cent. of best paid workers have increased their incomes considerably. They have experienced considerable tax cuts which, accompanied by an increase in earnings have, led to an enormous increase in their standard of living. The lowest paid 20 per cent. of workers have, since 1979, seen a net drop in their standard of living. The increase in their pay has been less than the rate of inflation, and they are poorer now than they were in 1979.
The Government tell us that the rich need more incentives in order to work harder and in order that our economy should be more efficient. They have the cheek to tell us that the poorest workers should be paid less in order to help to deal with the problem of unemployment. That is outrageous. It is pure dogma and there is no evidence for their case. It is an attack on the poorest workers.
New clause 1 deals with the attack on the young. Five hundred thousand of the 3 million poorest workers are young workers, one in five of all young workers in Britain. The Government propose that in future there will be no protection for young workers. One would think that the opposite would be the case. One would think that in any decent country there would be care and concern to ensure that the young, who lack experience and might be more easily exploited, are protected when they first go to work so that they can start their adult working life within decent structures and with decent working conditions.
The International Labour Organisation was deeply shocked by Britain's move. We had to resile from the treaty so that the Government could introduce this legislation. The ILO told us:
Almost all countries in the world now operate a minimum wage system and none to our knowledge excludes young workers.
Therefore, all the developed countries of the world and many Third-world countries manage to have a minimum wage system to protect their young workers. Henceforth, Britain does not intend to do so.
A myth has been put about simply by the constant repetition of the falsehood that high youth unemployment in Britain is due to high youth wages. That does not stand up to scrutiny. The movement of youth wages over a long period of time does not show that there is any connection between movement in youth wages and movement in youth unemployment. In fact, since 1979 youth unemployment has doubled and youth wages have dropped considerably. Of course, the Government are not content with that and wish to see even further drops in the pay of our young people.
What are the princely sums that the Government consider too high? The sums allocated to young workers under existing wage orders are £40 to £50 per week. I do not know whether Conservative Members understand that after tax and national insurance and after bus fares and meals have been paid for, the young people are left with very little more than they would receive on supplementary benefit. They are working for very little simply because they wish to work.
In Committee we witnessed crocodile tears about the Tory party's concern for the young unemployed. Conservative Members told us how deeply worried they were and how the only answer for our young people was that their wages should be cut so that more of them might get jobs. It is true that our young people are desperate. It is true, for example, that the suicide rate for young people is rising faster than for any other age group. It was proved, I believe, by research studies at Leicester university a couple of years ago that there is a link between youth unemployment and the suicide rate among our young people. There is no doubt that they are desperate and that they are suffering. The Government intend to exploit that desperation to lever their wages down even further.

Mr. John Maples: In Committee, the hon. Lady consistently misrepresented that argument. Surely the purpose is not to push down young people's wages; it is to attempt to create more jobs for young people by not setting artificially high minimum wage levels. It is entirely different.

Ms. Short: The argument is exactly the same. The words that are used are different. The hon. Gentleman says that if youth wages go down, there will be more jobs. That means that young people who are in work now on low wages will get lower wages. There is no evidence that there will be more jobs for young people. Inevitably, the poor low-paid young worker will be even poorer and even lower paid. At the moment wages councils set rates for them. The Government say that those rates are too high and want lower rates to be set. That is the purpose of the part of the Bill that we are contesting in the new clause.
The Government have been at this for a long time. They have tried all sorts of measures to lever down youth wages. The first was the deliberate adoption of policies to increase unemployment and make workers, including young people, settle for lower wages. The most blatant was the young workers scheme, which gave a massive subsidy to encourage employers to cut youth wages—£15 a week if they paid less than £40, under the scheme's initial form. We learned from that that a high proportion of the jobs that were subsidised would have existed anyway. So the whole expensive scheme was not generating new jobs.
Of the jobs that were generated—about 10 or 20 per cent. at most of the jobs that were subsidised—the vast majority were previously adult jobs. An adult was thrown out of work so that a young subsidised worker could be taken on. In so far as the Government's proposal creates a marginal increase in jobs for young people, it is at the expense of adult workers. The mothers will be thrown out. There is an overwhelming number of women workers in low-paid employment. They will be thrown out of work so that young people can be taken on at disgracefully low rates of pay. They in turn will be thrown out when they reach 21 so that some other desperate young person can be taken on for an unacceptably low rate of pay.
New clause 2 refers to disabled people. There are many disabled young workers. Under the Wages Councils Act 1979 scheme, disabled workers had to be paid the legally required rates unless there was an application for an exemption, arguing that there was some reason why a disabled worker could not work as efficiently as another. All wages councils were careful to ensure that disabled workers were not exploited. Only about 80 licences per year were granted to enable employers to pay less than the

legal minimum rate. In sweeping away the protection for all workers under 21, the Government are sweeping away protection for disabled young workers and saying that it is a free market and that employers can exploit young disabled people as much as they like and pay them whatever they like. It is a free rein for the market. It is outrageous and sickening.
The Government pretend that they are making the change because they care for the young and want to help them to work. It is not true. If it were, there would be a change in economic policy. Without that, we shall not acccept any argument from the Tory Benches that pretends for one minute that they have any concern for the unemployed. The truth is that, all over the developed world, when unemployment rises, youth unemployment rises more rapidly because young workers are marginal and lack skills and experience. When employers are not recruiting, it is the young whom they will not recruit first. The way in which to reduce youth unemployment is to lower the general level of unemployment. In every developed country, when unemployment falls, youth unemployment falls rapidly. The only way in which young workers will get back into jobs is through a change of economic policy which generates jobs for all young people.

Mr. Geoff Lawler: I thought that by now the hon. Lady would have accepted the economic realities of life. If what she says were so, why, in Germany, where there are more realistic wage levels for young people, is youth unemployment about the same proportion as general unemployment, whereas in this country it is about twice as high?

Ms. Short: I am afraid that the hon. Gentleman is not well informed about Germany. Rising unemployment hit Germany later than it hit this country. The application of monetarism came to it later. When unemployment rose, youth unemployment rose too. The pattern is the same throughout the EEC: a study of some years ago documents it.

Mr. Dave Nellist: May I add to my hon. Friend's explanation? The Tories put forward the fallacy that young people's wages as a proportion of adult rates are less in Germany than in this country. That fallacy is clouded by the fact that the hourly manufacturing earnings of workers in Germany are at least 40 per cent. higher than in this country. The reason why unemployment rose at a slower pace in Germany is that in the late 1970s and early 1980s the Government expelled over 1 million gastarbeiter back to countries such as Spain and Turkey. Is that the Tories' solution—to expel 1 million of the immigrant workers in this country to reduce unemployment?

Ms. Short: I am sure that hon. Members are listening to my hon. Friend's points.
The Government's policy is immoral. It is immoral to attack the poorest and to seek to generate greater inequality. The Government have achieved a massive increase in inequality since 1979. The Bill is intended to take it further and make poor workers even poorer. II is based on an economic fiction. The Labour party is absolutely opposed to everything that the Government are seeking to do in part II. We are committed to reversing it.


The way things are going, we expect to do it quite soon. We in the Labour party will introduce a national minimum wage with appropriate rates for young people.
The Tory party should be deeply ashamed of itself in seeking to attack the living standards of the poor, the young, young black workers, women workers and disabled workers. That is what they are doing in part II. New clause 1 is an attempt to reverse some of that damage.

The Paymaster General and Minister for Employment (Mr. Kenneth Clarke): We intend to have a reasonably short debate, but this is an important issue which goes to the root of the Bill. My hon. Friend the Under-Secretary will reply to the debate and concentrate on the new clause and amendments concerned with disabled workers.
The hon. Member for Birmingham, Ladywood (Ms. Short) has just made her case on behalf of the Labour party, but, as my hon. Friend the Member for Lewisham, West (Mr. Maples) said, she puts the case for and against the Bill in a curious way. The Government have made it clear throughout that our objective in introducing the Bill is to increase employment opportunities, particularly for young people. Although the hon. Lady speaks with considerable passion, I cannot believe that she really thinks that we are motivated by a curious desire to drive down wages for its own sake or to extend the rate of poverty. The language that she uses always implies that.
More worrying than the eccentricity of approach that that betrays is the fact that the hon. Lady seems to be going back to a position where she almost completely denies any link between rates of pay and employment prospects. She brushes aside remarks about comparative rates of pay for young people and employment—

Mr. Nellist: indicated assent.

Mr. Clarke: I see the hon. Member for Coventry, South-East (Mr. Nellist) nodding vigorous assent. I shall come back to that matter in a moment. I wonder where the new realism of the Labour party has gone. We are back into a new higher wage campaign regardless of the impact on employment in general, and particularly that of young people.
New clause 1 goes in totally the opposite direction to our proposal to enable young and inexperienced workers to take a wage that is more likely to induce the employer to offer them their first step into the labour market. The new clause suggests that we should retain an arbitrarily fixed rate of pay for young people who are regarded as undertaking the same work as adults. It does not explain how on earth we shall determine whether the young person is doing the same work as an adult, but, from remarks made yesterday, it appears that we shall have something along the lines of equal value for equal work being determined by tribunals.
The new clause suggests that a definite relationship between young people's earnings and those of adult workers should be fixed by the wages councils, which is not so at the moment. It says that at least 70 per cent. of the adult rate should be paid to 16 and 17-year-olds. That is driving up the relationship between young people's and adult wages, compared with the present position. No fixed minimum for young people is provided for in the existing legislation. The existing wages orders lay down an average

of about 65 per cent. of the adult wage for 16-year-olds. The Labour party's new clause would immediately increase the pay of those who have come straight out of school and bring it nearer to the pay of experienced adult workers. The hon. Member for Ladywood speaks with great sincerity and passion, but she is fervently arguing for a change which would deny job opportunities to very many young people.

5 pm

Mr. Michael J. Martin: The Paymaster General must know that a three-year apprenticeship for young people is recognised by certain industries. If somebody leaves school at 16 and completes a three-year apprenticeship. he could be doing the work of a skilled worker before he reached the age of 21. Is the Paymaster General saying that the employer will pass on to the customer the saving that he makes by employing a young worker or will he put it into his own pocket? That would be exploitation.

Mr. Clarke: There is nothing to prevent employers in any industry from moving a young employee on to the full adult wage as soon as that employee is making as full a contribution as an adult worker. Apprenticeships lead people on to fully qualified craft rates, but that does not apply to wages council industries. Apprenticeships do not need to be backed by law. We are dealing with a provision that would make it obligatory for a 16-year-old to be paid 70 per cent. of the adult wage. Given the choice, all employers would prefer to employ an experienced adult worker rather than a young worker. The Labour party's policy would make it illegal to offer somebody a lower wage while he was training and acquiring a skill. We believe that as soon as he is able to do all that an adult worker can do, he should receive the adult worker's wage.

Ms. Clare Short: A number of different formulations are included in this series of amendments. The Labour party is seeking to maintain protection for young people. The Labour party suggests that we should stay with the 1979 Act and give each wages council the right to pay young people whatever rate it thinks fit. The Paymaster General will be aware that a number of wages councils are unhappy about his proposals, particularly about the movement of the age of majority from 18 to 21. Therefore, he should not concentrate on the provisions of new clause 1. The Opposition would settle for a return to the 1979 Act.

Mr. Clarke: I am relieved to hear that the hon. Lady is showing a little flexibility. However, I do not believe that she is protecting young people. She is telling young people who work in these industries that they will all get higher pay, but she will deny job opportunities to many of them. That is not protection.
The new clause is part of the initiative against low pay which the hon. Member for Kingston upon Hull, East (Mr. Prescott) mentioned yesterday, and it is closely attached to part II. Yesterday the Labour party may have called it a campaign against low pay, but I prefer to call in the Labour party's new campaign for higher pay, particularly higher pay for the young, the inexperienced, and the unskilled.

Mr. John Prescott: rose—

Mr. Clarke: I shall give way to the hon. Gentleman in a moment.
I have in front of me a copy of the hon. Gentleman's news release, in which he explained that he was setting out the Labour party's new approach. According to his definition, no fewer than 8 million people receive poverty wages. That is one third of the entire work force. His policy would raise the pay of those 8 million people—a third of the entire work force—and it would depend upon a combination of measures. In particular, it would depend upon the level of the statutory minimum wage. The hon. Gentleman yesterday, and the hon. Member for Ladywood today, made it quite clear that the Labour party is committed to that policy. If we are to raise the wages of a third of the work force, at some stage the hon. Lady ought to tell us what level of pay increase she proposes, and what impact this campaign for higher pay for 8 million people will have on the rest of the work force. I refer to adult workers, male workers and workers with skills.
Yesterday the hon. Member for Kingston upon Hull, East was at pains to assure those workers that they, too, would share in this bonanza. He said that the Labour party's policy would not hold anybody back. A national minimum wage would provide a floor below which no worker would be allowed to fall and that, as unions would still be able to negotiate above that floor, there would be no danger of it becoming a ceiling for pay settlements. No mention was made yesterday of productivity, performance or output.
The Labour party's campaign is designed to inform people that a third of the labour force will receive higher pay. If that is associated with the hon. Gentleman's remarks about changes to trade union legislation, it means that it will be rather easier for those who want to maintain their differentials to take industrial action. The strike weapon will be strengthened to ensure that they are able to maintain those differentials.
This drive for generally higher pay throughout the economy, particularly at the bottom end of the scale. has come at a time when employment in this country is increasing at a faster rate than ever before. Since the spring of 1983, nearly 1 million new jobs have been created. The most worrying threat to the creation of new jobs is higher unit labour costs in this country compared with those in other countries. I have the comparisons in front of me. The latest quarterly figures that are available for 1985 show that in Canada wages and salaries per unit of output in manufacturing increased by 1 per cent., in the Federal Republic of Germany by 2 per cent. and in the United Kingdom by 6 per cent., whereas in Japan they did not rise at all. If one takes the whole-year figures for 1984, our unit wage costs in manufacturing increased by 4 per cent., whereas they declined by 2 per cent. in Canada, by 1 per cent. in the United States, by 4 per cent. in Japan and by 1 per cent. in the Federal Republic of Germany.

Mr. Nellist: Will the Minister give way on that matter?

Mr. Clarke: The Labour party is campaigning for a general surge in wage costs at a time when our unit wage costs in manufacturing are rising at a faster rate than those of our competitors, when the living standards of those who are in work in this country are higher than ever before and when domestic inflation is falling rapidly.

Mr. Nellist: Will the Minister give way?

Mr. Clarke: This policy will not protect the low-paid, the young, or anybody else. If the Labour party embarked upon this policy, it would drive up unemployment.

Mr. Nellist: Is the Paymaster General not aware that there are two halves to a fraction? If industrial manufacturing output has declined, the equation will naturally be higher. If he looks at his answers to me during the last few days relating to the hourly earnings of workers in manufacturing industry in Britain. Italy, France and Germany, he will find that the pay of workers in those countries has risen faster than in this country and that it has been based upon higher investment.

Mr. Clarke: If there is one thing that is more likely than anything else to cause a fall in manufacturing output in this country. it is to allow our unit wage costs to rise in comparison with those of our competitors. If the hon. Gentleman wishes to ignore our competitive position. he is encouraging a decline in our manufacturing industry.

Mr. Maples: On my right hon. and learned Friend's point about the Labour party's proposals for massive pay increases, I should point out that this experiment was put into effect in 1974. Under a Labour Government there was a massive rise in wages, but there was no rise in production. The Labour Government then found that they had to deal with the problems that they had created by introducing a statutory pay policy.

Mr. Clarke: I agree with my hon. Friend. There was a similar experiment in France a few years ago.

Mr. Prescott: rose—

Mr. Clarke: I apologise to the hon. Member for Kingston upon Hull, East. I promised to give way to him, and I shall do so now, but before he rises I shall ask him whether the right hon. Member for Birmingham, Sparkbrook, (Mr. Hattersley) was consulted about this campaign yesterday, and whether his right hon. Friend the Leader of the Opposition is involved in this new policy of driving up wage costs in British industry? How does all this fit in with the current attempts to make Labour appear to be a credible alternative Government? It seems to me that the Labour party is not to be trusted either on pay policy or on the trade union front. We are back to policies being advocated that will have a completely destructive effect upon employment in this country.

Mr. Prescott: It may come as a shock to the Paymaster General to learn that these Benches are the Opposition and not the Government. We are debating the Government's Bill. We have heard much rhetoric from the Minister about the number of strikes, but more days have been lost through strikes under this Government than in the five years of Labour Government. The Minister knows that, because he gave that information in a parliamentary reply.
We are discussing 8 million people who are under the poverty wage level, and that is the reality. A Council of Europe convention determines that low pay is two thirds of an industrial wage. I am surprised that the Minister is not aware of that, because we were at the Council of Europe at the same time. That convention determines the poverty level. Yesterday we said that the number of people paid poverty wages had doubled since the Government came to power in 1979. We argued that there was a need for legislation, and the new clause is concerned with that need.
This is only an intervention and I cannot take up all the time of the debate but I wish to comment on the Minister's statement that too much money is paid to youngsters and to deal with the 70 per cent. wage level referred to in new clause 1. Is the Minister aware that in hairdressing, 70 per cent. of the adult wage rate would be about £44? Is £44 too much to pay youngsters in 1986?

Mr. Clarke: One interpretation of the Council of Europe's convention produces the figure of 8 million to which the hon. Gentleman referred and to which his policies, set out yesterday, are most especially directed. The figure of 70 per cent. of the wage level, which the Labour party would restore to young people, would produce a comparatively low figure as a legal minimum in some industries. However, in Germany, the proportion of young people's incomes to that of adults is much lower. When people take their first job they have little to offer but enthusiasm and the hope of acquiring skill and experience. They must expect to receive lower pay in relation to adults and in comparison to what they will receive when they have acquired their skills.
The hon. Member for Kingston upon Hull, East objects to our debating his policies, but, with respect, we are discussing the subject matter of the debate, which is the new clause put forward by the Labour party. The Labour party advocates that we should have a statutory minimum wage level for young people. It is plainly part of the policy—the fair pay policy—which was set out by the hon. Gentleman and by the hon. Member for Ladywood to drive up the pay costs of British industry on a substantial scale. In our opinion, that would sacrifice many jobs.
Our policy is quite straightforward. The earnings taken out of industry by any workers have to be based on the value that the worker can put into that industry. The success of the worker helps his company to succeed in the market place, including the world market place. Higher wages are a desirable objective for most people, but they must come from better performance. Our latest proposal is a concept of profit sharing. This would encourage industry and those working in a particular industry, and thus the rewards are more closely linked to the success or otherwise of the enterprise.
The young person who is trying to take his or her first step in the labour market certainly needs to be protected, and I agree entirely with such protection. In my view, they need to be protected against the risk of hen priced out of a job. That is a risk which they would run if the wages councils provision, as advocated in the new clause, was adopted, or a national minimum wage, as canvassed by the hon. Member for Kingston upon Hull, East, was adopted.
I ask the House to reject new clause 1 and accept the link between pay and employment. If the Labour party rejects that link, it will be folly in the extreme. The hon. Member for Ladywood tries to refute any link between present employment and pay by citing the figures which she always cites. She argues that since 1979 there has been an increase in youth unemployment. These figures take in the full winds of the recession since 1979, but youth unemployment has not risen by as much as it has in other sections of the population. The fall in earnings of young people vis-à-vis adults has taken place only since about 1982. Ever since young people have followed the policies encouraged by the Government and taken a lower

proportion of the adult wage, the percentage of young people unemployed has decreased. The position of young people has improved.
5.15 pm
Between April 1982 and April 1985 the average annual increase of earnings for the under-18s has been 5·7 per cent., while for those aged 18 and over it has been 8 per cent. The number of unemployed under-18s as a proportion of the total unemployed has fallen. In January 1983 it was 6·9 per cent., in January 1984 it was 6·4 per cent., in January 1985 it was 5·9 per cent. and in January 1986 it was 5·5 per cent. I am pleased that the overall unemployment rate for under-18s has fallen.

Mr. Nellist: It is called YTS.

Mr. Clarke: In this period when the earnings of youngsters have gone up more slowly than have earnings for adults, the unemployment rates for under-18s has fallen. In January 1983 the figure was 25·2 per cent. in January 1984 it was 21·3 per cent., in January 1985 it was 20 per cent. and in January 1986 it was 19·1 per cent.
The hon. Member for Ladywood bitterly attacked the young workers scheme, but that has created, on any analysis, 120,000 additional jobs for young people, even allowing for displacement, which of course would in part modify the result. The number of unemployed under-20s has fallen by 63,000 since 1983. That is over 10 per cent. of the total. Youth unemployment is decreasing. The level has come down with the help of the youth training scheme, the young workers scheme and the new workers scheme.
There has been a growing realisation in industry that young people's wages must bear a sensible relationship to adult wages if people are to be given their first job.—[Interruption.] The very mention of youth training always causes excitement. The hon. Member for Kingston upon Hull, East and his colleagues must face the experience of the past four years, when unemployment among young people has been falling steadily. They have responded to that by mounting a virulent campaign which is a combination of a weakening commitment to YTS and driving up pay costs. That would drive up youth unemployment. I believe that their campaign is thoroughly misconceived and irresponsible. The irresponsibility is wrapped up in the guise of a low-wage campaign. The Labour party cannot be trusted in this area. The claim that the Labour party has a sensible economic policy is incredible when its employment team is let loose advocating this type of inflationary and anti-job nonsense.

Mr. Nellist: I arrived in this Chamber almost three years ago as one of the youngest Members elected at the election of 1983. I am the youngest Member to be returned to Parliament by the city of Coventry since Coventry has had Members of Parliament. Therefore, it is natural that, over the years, I have spent much of that time defending young workers against the ravages of the Government and their pathological hatred for young people.
I have had special responsibility to champion the hopes and aspirations of millions of young workers in the face of mass youth unemployment. The three months I have spent on the Bill have not changed or disavowed my opinions in one respect. There was an unreal atmosphere about the speech of the Paymaster General. I might hope that it was his last speech, but that would be too much to hope for. In Committee there were many platitudes about


how the measures were designed to support and provide jobs for young people. Frankly, nobody outside the Chamber and very few inside it believe that. The Bill is designed to continue the trend of driving down the wages of young people so that the profits of those who financially backed the Tory party at the last general election are suitably enhanced.
What is the real world, away from those platitudes? The real world should interest the hon. Member for Langbaurgh (Mr. Holt), in whose constituency I was brought up. Its careers office has a little story in this morning's Daily Star under the headline:
I gotta job! Joy for girl in 5,000
It reads:
Lucky Karen Sanderson has beaten 5,000 other desperate youngsters to get the only job going in the dole capital of mainland Britain.
The Cleveland careers service had only one unfilled vacancy to satisfy 5,278 registered unemployed."
No fewer than 55,000 people are unemployed, and 36 per cent. of them are under 25. The principal careers officer said:
The day the young girl came in for a job we had only one available. Today we have only eight jobs available for all those thousands of youngsters needing work. We have another 4,000 young people on youth training schemes. But they will be looking for real jobs in a year or two. We know that 65 per cent. of folk coming off YTS projects can't find real jobs.
That is the real world that the Chamber must deal with if it is to have any relevance to the hundreds of thousands of young people who remain unemployed under the present Prime Minister and the Government.
Matters are equally grim in my city of Coventry, where 5,000 more youngsters will leave school this summer. I telephoned our careers office today. We are better off than Cleveland: we have 76 vacancies. That still leaves 4,924 young people without a job. We already have more than 5,000 unemployed young people competing for the same jobs. Among them are young people leaving special schools. They might be mentioned in the debate on new clause 2.
We had a brilliant year in Coventry last year. Of the 189 physically and mentally handicapped youngsters who left special schools, seven found work. Two of them went to sheltered work. That was better than the previous year, when only two found work. What hope will the handicapped youngsters of Coventry have when another 190 leave this summer? It might be suggested that, if the seven who got jobs took a wage cut, there might be an extra one or two jobs for those who leave school this summer. That is economic and political rubbish.
One ward in my constituency has an official male unemployment level of 44·2 per cent. In reality, it is well above 50 per cent. That is the situation in Coventry. There is no future for young people in our city, the midlands or the country as a whole, short of getting a genuine Socialist Labour Government prepared to plan the economy rationally and to guarantee young people jobs.
Under this Prime Minister, half a million young people have never had a job since they left school. Ten years ago, 61 per cent. of 16-year-olds had a job. Only 18 per cent. have a job now. The studies, the projections and the computer models that were wheeled before us in Committee to support abolishing young people's right to a minimum wage could only come up with a prediction that between two and 160 jobs could be created in

Coventry, South-East, or between eight and 600 jobs could be created for the whole of Coventry if all the 500,000 young people took a pay cut. So what?
In the month before Christmas, a factory in Coventry—General Electric Company—the chairman of which is the Tory Member of Parliament for Waveney (Mr. Prior), declared 1,000 redundancies, the bulk of them in my constituency. One half of the Tory party is chucking people out of work while the pious hopes of the other half urge young people to take wage cuts to try to create jobs.
No other country has done what the Paymaster General is asking us to do—to denounce the International Labour Organisation convention No. 26 and deny young people the right to a legal minimum wage. His justification is that they should take lower wages to create more jobs—that we should "price young people into jobs'. Will that happen? Nye Bevan used to ask, "Why look in the crystal ball when you can read the book?"
Sir J. Hoskins talked about the real aim of the youth training scheme when he was in the Prime Minister's private office. It is on the record. It was to increase the differential between youth and adult wages. That has happened. When the youth opportunities programme allowance was introduced in 1978, youngsters were on £19·50 a week. The YTS equivalent today is £7·30. If it had increased with the retail price index, youngsters would now be on £38 a week, and if the allowance had increased in line with average earnings, they would be on £44 a week. In other words, school leavers have taken a £17 a week pay cut in the past eight years while youth unemployment has trebled.
There is no evidence to support the argument that cutting wages creates jobs. The Minister might assert that there is a link. If there is, why is the highest unemployment not in Sweden and the lowest unemployment not in India? Half a million young people will get pay cuts unless new clause 1 is accepted. That means one in five young people in a job or one in three school leavers in their first job. The average wages of these people is about £50 a week—in hairdressing it is just above £30 a week for a first-year apprentice.
I notice—this is a bit of a constitutional oddity—that the Prince of Wales' consent is needed before the Bill will get Royal Assent. I do not suppose that he has ever had to live on £40 a week. There is a huge disparity between the very rich and the half million young workers in service industries such as hotels, restaurants, catering, clothing and hairdressing. The Government's hypocrisy is revealed by the fact that one day in July they said that young people must price themselves into a job and the next the Prime Minister talked of the need for recruitment, retention, motivation and morale among the 2,000 judges, generals and top civil servants who needed a 40 per cent. increase in their salaries, taking the Cabinet Secretary's salary up by £500 a week.
We cannot take the Bill entirely in isolation. It is part of a process to create a conveyor belt of school leavers, leaving school, doing two years on YTS for artificially depressed training allowances—cheap labour rates—and doing another three years before they reach the maturity accorded to them by the Government at 21, when they will get an adult rate of pay. To ensure compliance, the Department of Health and Social Security has issued circular CS/INF/YTS/7/85, paragraph 18 of which instructs careers officers to inform the DHSS if a youngster refuses to go on a youth training scheme, whereupon they


will get a six-week cut in benefit. At least it was six weeks until about 10 days ago when the Secretary of State said that it would be a 13-weeks penalisation.
Next week—perhaps next Monday night—the Secretary of State will introduce a £5·80 cut in the supplementary benefit level for the under-18s. Just to tidy it all up, if youngsters object, or try to organise themselves into a trade union to enhance wages and conditions, they can be dismissed without recourse to an industrial tribunal if they have not worked two years full time or five years part time. That demonstrates the Government's pathological hatred of youth.
The Bill does not tackle the real causes of unemployment. The real cause is the refusal of those who own wealth to invest. That is why production is lower than it was in 1973. Investment has fallen, output has fallen, and we now import more factory-made goods than we export. It is the first time that the workshop of the world has done that for more than 300 years. That is why the gaps between us and other countries which the Minister likes to quote—Germany, America and Japan—have opened.

Mr. Martin Flannery: Will my hon. Friend give way?

Mr. Nellist: I cannot. I apologise, but the signals are coming and I might be strangled by the Whips if I do not finish soon.
There has been a refusal to invest, so where will the profit come from—by driving down the wages of young people. There is enough money in the country to give everybody a decent wage. If we brought back some of the £70 billion that has gone abroad during the past six years, there would be enough to pay decent wages.
We want to offer a real job to young people. We are not advocating their donning smocks and showing American tourists around the Tower of London, which is what the Tory Government are turning us to in the 1980s. The wages councils were set up 75 years ago. We are trying to give young people a little protection, but I shall vote for the new clause in the Division. The new clause will have more bite if other policies of the Labour party and the Trades Union Congress, such as a national minimum wage of two-thirds average earnings, are implemented.
I shall put that into figures for the Paymaster General. It would require a wage of £120 a week for adult workers. If 70 per cent. of that was offered to young workers, they would be lifted out of the poverty trap. Half a million youngsters would then have a decent rate of pay and 8 million adults would look forward to the future, and be able to afford a holiday, a television, to run a car and other things which are necessities in Britain today.
On 31 May thousands of workers, principally women, will demonstrate, rally and march in Manchester under the banner of the North-West Region Labour Women's Council, demanding a national minimum wage and a mass recruitment campaign to trade unions and the Labour party of young workers who are affected by this provision. I hope that a repeat of such campaigns will signal the death knell of the Tory Government and the low-wage, cheap-labour economy, on which their big business backers depend for their luxury life styles.
It ill behoves the Paymaster General who is on almost £1,000 a week to tell 500,000 hairdressers and other young

people who work in hotels, shops. restaurants, catering and clothing establishments that £40 a week is too much for them in Maggie's Britain. I hope that the new clause is passed overwhelmingly tonight.

Mr. Martin: I wish to speak to new clause 2 and amendment No. 81, both of which are in my name.
The Government propose to take young people out of the protection of the wages councils, but I urge them to reconsider their decision with regard to the physically and mentally handicapped. From my experience as a trade union officer and a councillor serving on the social work committee of the old Glasgow corporation, I know that young people, especially mentally handicapped young people, can be exploited. Some people will say that only a minority of employers will stoop so low, but if it were not for the minority of bad individuals in every respect. the House would not require legislation to protect the community.
I remember having to go to the Inverclyde local authority in Greenock because there was a complaint that some workers were not receiving a proper bonus. I discovered that the complaint was unjustified. The personnel officer had set one section aside for disabled and mentally handicapped workers and ensured that for 52 weeks of the year young people in that gardening section received a guaranteed bonus. During the summer that meant that able-bodied workers received a bigger bonus, which is how the complaint arose.
From conversations with the workers and the personnel officer, I discovered that he was doing a remarkable job. He did not require legislation, but he protected those young workers because he saw a need to do so. One worker could not read, so the personnel officer instructed the head gardener to draw up a plan of colours so that that worker would know the type of flowers to lay in a flower bed. He instructed a charge hand not to allow another worker to operate a motorised lawn mower because he knew that from time to time that worker had epileptic fits. Another worker turned up for work on holidays because he did not understand what holidays were. The personnel officer took it upon himself to phone that young man's parents to tell them that he should not turn up for work on the Queen's birthday and other public holidays. The personnel officer ensured that those workers were well protected, without any prompting.
On the other hand, there is the Social Work (Scotland) Act 1968, and I know that social workers are prepared to keep an eye on mentally handicapped workers who were in their care before they reached the age of maturity, which in Scotland is 16. I know of cases in the Strathclyde region where some of those workers are 50 and still receive help from the social work department. Social workers help those people mainly because from time to time cases are reported to them of workers who are being exploited, and who work long hours and are not paid proper wages for hard, heavy work in kitchens, hotels, and, sometimes, circuses. They are respectable people who do not understand their rights.
I could talk all night about the problems that arise with those workers. Surely, if we allow people to work, we should ensure that those who need protection are protected through legislation. We are failing in our duty if people in that category are exploited.

Mr. Richard Holt: I am a little confused. The hon. Gentleman is arguing one case, but the amendment seems to imply another. It seeks to remove all disabled workers from part II. At least under part II there is a minimum provision. but the amendment seeks to remove it.

Mr. Martin: I am aware that time is short. I have explained my aims to the Minister, and if he feels that my new clause is defective he can, nevertheless, take my point on board. That is often the case with new clauses and amendments, but hon. Members are entitled to speak to them so that they can explain what they want, and if the Government can support the change it is up to them to ensure that the wording does not have the wrong effect.
The Minister may argue that if we introduce or tighten up legislation it will deter employers from exploiting mentally and physically handicapped people. There must be a balance between ensuring that we find as many young people a job as possible and ensuring that they are not exploited by unscrupulous employers. It should be remembered that employers do not always know what their workers' rights are, let alone that employees know their rights. Legislation should be available to help them when complaints are made.

Mr. Lawler: In stating that I have the honour to be president of the British Youth Council and chairman of the all-party youth affairs group—I stress that I do not speak in that capacity today—I hope that I can prove that I do not have a pathological hatred for young people. On the contrary, one thing that I have in common with the hon. Member for Coventry, South-East (Mr. Nellist) is that we are not so far out of that sector of our lives as are some hon. Members. Indeed, I suffer from the delusion sometimes that I am still in it.
One thing that regular contact with young people has taught me is that they have a far more realistic view of their worth and of economic realities than does the Labour party. One needs only to consider the high percentage of those who have expressed satisfaction with the youth training scheme and the opinion polls that have been conducted among young people to see the proof that they are willing to undertake work at sensible and realistic allowances. The Labour party's dogmatic approach will deny them the opportunity to undertake such work.
As my right hon. and learned Friend the Paymaster General said, the Opposition must think we believe that there is some political mileage in being vindictive against young people by driving down wages. No political party would seek to attack the living standards of young people. We are seeking to do the opposite. There is no lower standard of living for a young person than the dole or supplementary benefit. The proposed legislation seeks to improve young people's living standards by giving them jobs. That is the most significant step that they could take.
As my right hon. and learned Friend said, the effect of the new clause would be to increase the wages of 16 and 17-year-olds in industries covered by the wages councils. In the clothing industry it would mean an employer paying £49·49 insted of £46·06. In the retail food sector it would mean an employer paying £56 instead of £50·38. That would mean fewer jobs and a further falling behind in competitiveness at a time when all our major competitors pay a far lower proportion of wages to young people than we do. They pay 20 to 30 per cent. of adult wages, rather than our 60 to 70 per cent.
The new clause would also lessen the opportunities for training and cut the opportunities for young people to advance themselves. If companies must pay so much for young people, they will not spend more to train them. We must ensure that young people are recruited at sensible allowances, so that companies will invest time and money in them and enable then to make a more effective contribution to their employers.
The new clause would block young people's advancement. It is better that young people get on the first rung of the ladder. There is no career on the dole or any benefits structure that they can climb. The only way in which they can advance themselves is by getting their first job, and this legislation opens the door to employment opportunities.
The savings that employers could make by employing young people at more realistic wages could be used in two ways: first, to increase training; and, secondly, to pay more to skilled workers. I agree with the hon. Member for Birmingham, Ladywood (Ms. Short) that skilled workers in Britain are paid less than those in competitor countries. In Germany workers are paid. more because a much higher percentage of them have vocational qualifications and therefore contribute more to their companies and deserve higher wages.
The new clause would hit those who are least qualified and who find it hardest to get jobs. The Labour party is deserting what it has always claimed as its traditional ground and is aiming at the middle-class vote. However, the Conservative party has not forgotten the most disadvantaged and the least fortunate and is giving them an equal chance to prove themselves.
Half a million young people covered by the wages councils are affected by the Bill. Another 500,000 unemployed young people aged under 20 will also be affected because the legislation will give them greater opportunities of employment. Setting a rigid limit such as the clause proposes will not help those in work in the long run, and will harm the chances of those whom we are seeking to help, those who do not have jobs.

Mr. David Penhaligon: I commend the speech made by the hon. Member for Glasgow, Springburn (Mr. Martin). I do not know whether his amendment is in order, but he was arguing a case which deserves some specific and detailed reaction. Whatever the broad merits of this part of the Bill, we would not wish the chronically disabled and mentally retarded to be placed in an abominable position, with not even their intelligence to protect them. The hon. Gentleman advanced a strong argument, and I hope that the Minister will respond to it.
The Government have got the legislation wrong. I do not agree with many of the speeches that have been made by Labour Members, but the abolition of all wage controls for those aged under 21 is unjustified. I represent an area of endemic unemployment, with the lowest wage structure in Britain. I know what happens to wages in industries not covered by wages councils when wage protection is removed. It is not uncommon in areas such as mine for qualified 19 or 20-year-olds, some with four or five C)-levels, to be earning £50 to £55 a week. That is what happens when wage protection is removed. Other parts of the country are more fortunate, but that is the logical outcome of the Government's proposals.
5.45 pm
However, there is a minute amount of truth in the Government's broad thrust, which says in essence that to pay the adult rate to an 18-year-old in industries covered by wages councils must militate against the employment of other young people. That is true. It might not be popular with young people, and it might not gain any votes to tell them, but I have no doubt that to pay the full adult rate to an 18-year-old, especially in a low-wage area such as mine, militates against their employment prospects. That occurs especially where an employer has an alternative choice of people aged 25 to 30 with skills, some experience and the other qualities acquired with age. They will compete against youngsters.
Many Conservative Members have not faced the problem. I criticise them because they have extrapolated to infinity from the specific, although I recognise it to be a genuine problem. The evidence suggests only a couple of steps, as opposed to the journey from here to the unknown.
The Government should have redefined the adult rate—I call it the experienced rate—to the age of 21. In an odd way, they have done that. They should have maintained some protection for people within those areas, having renegotiated the steps up to the age of 21. In the reply to the debate—it must have been considered because I have argued it in the House several times—the Minister must say why the Government rejected that solution. I have heard no substantial argument to convince me that that would not have been the rational and sensible outcome of the legislation.

Mr. Holt: Is the hon. Gentleman aware that part of the problem lay in previous Governments reducing from 21 to 18 the age at which full national insurance and other contributions were made? A person is an adult either at 18 or at 21. We are now introducing hybridity, which will cause further confusion.

Mr. Penhaligon: I hear what the hon. Gentleman says. I am trying to reflect on the conventions in some of our European partners. In some countries it is not unknown for the adult or experienced rate not to be paid until the age of 23 or 24. In Japan, in some industries, the top or skilled rate is not paid until people are approaching their 30s. I do not accept the argument that as soon as someone if given the franchise, which is rightly given at 18, that automatically coincides with the day on which he has all the skills, experience and other qualities accumulated while earning a living. I should be pleased if the Minister would reflect on that.
The hon. Member for Birmingham, Ladywood (Ms. Short), who opened the debate on the new clause, made a statement which may be right, but which was different from what I originally understood. I am not enthusiastic about the fact that the Government have withdrawn from the International Labour Organisation. I checked with the Library some months ago and was told that, although the Bill removes some minimum wage protection for those under the age of 21, it would still be possible to pass the Bill and to remain inside the ILO convention. That was asserted to me by the Library. and I should like a reply from the Minister. Will it be possible to stay in the ILO with the minimum wage protection which the Bill still gives to some, albeit only those over the age of 21?
I raise this issue because I was worried by the advice that I was given. If the Government could have stayed in,

why did they withdraw? I fear that they withdrew, not because of the Bill, but because it will give them the power at some time in the future to introduce in Parliament an order to abolish all wages council restrictions from A to Z which would be debated for about one and a half hours.

Mr. Prescott: That is in the Bill.

Mr. Penhaligon: If that is so, I live and learn.
I am aware that under the Bill as drafted it will be possible for the Government to put before Parliament a proposal to abolish overnight all wages control and wages councils. I am asking whether the Government have withdrawn from the ILO because the possibility of doing that appeals to them, or because the changes provided for in the Bill forced them to withdraw from the ILO. I fear that it is the former, which makes the Government's proposals even less acceptable.
My questions therefore are, first, why can the Government not step up the age to 21. and, secondly. did they have to withdraw from the ILO because of the Bill?

The Parliamentary Under-Secretary of State for Employment (Mr. David Trippier): This has been an interesting and pretty long debate and I have somewhat limited time in which to reply. I wish first to reply to the point raised by the hon. Member for Glasgow, Springburn (Mr. Martin), who was supported to some extent by the hon. Member for Truro (Mr. Penhaligon).

Ms. Clare Short: I raised the matter also.

Mr. Trippier: Indeed, yes. I appreciate that credit must be shared by Opposition Members, although in fairness I am dealing with what has been said by the hon. Member whose name is appended to the amendment.
It has been quite a problem for all members of the Committee to wrestle with this. The hon. Member for Springburn is aware that there is power under present legislation to award certain permits to disabled people who would not normally be employed by employers on an individual basis, taking each case on its merits in the instance of those people disabled by any form of handicap. mental or physical.
We have gone through a period of consultation in the Department with lobbies representing handicapped people. Since the hon. Gentleman raised the point at the last sitting of the Committee, as did my hon. Friend the Member for Bolton, North-East (Mr. Thurnham), I have had long discussions with the right hon. Member for Stoke-on-Trent, South (Mr. Ashley), whose name also is appended to the amendment, and with Brian Rix. the director-general of Mencap. On balance—rather like the TUC, only on balance—they do not think that there should be incorporated on the face of the Bill the legislation that is currently in force by way of a new clause. I say that because I wish to assure the hon. Member for Springburn that I have taken this point seriously both in Committee and today. I am anxious to continue to meet the lobby representing handicapped people to see how we can assist.
In the discussions with Brian Rix, I was interested to know that his members are pleased with the scheme run by the Manpower Services Commission that is known as the sheltered placement scheme. They are anxious to see the Department of Employment develop and strengthen that scheme, which they think has been a success.
I was interested in the comments of the hon. Member for Birmingham, Ladywood (Ms. Short) in opening the


debate. As I understand it, she says that this legislation is designed to cut the wages of the country's poorest workers. It is to that that we so strongly object—the fact that the Opposition are wittingly trying to mislead the public, because they talk constantly as if we are scrapping wages councils. Nothing could be further from the truth. We took notice of the consultation exercise, for which we were responsible. As my hon. Friend the Member for Bradford, North (Mr. Lawler) said, we passionately believe that by discriminating in favour of the under-21s we will allow them to take that important first step on the employment ladder. The hon. Member for Ladywood and her hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) peddle the propaganda, and always have done, that we are scrapping the lot. We are not.
My right hon. and learned Friend the Paymaster General and Minister for Employment referred to the new realism that is creeping in. There is no way in which this Government would do anything to harm the young people whom we are anxious to see in employment. That realism is creeping into the TUC. It has not yet hit the Labour party. The document to which I referred in Committee—I sent a copy to the hon. Member for Ladywoodand which was written by senior trade unionists and members of the TUC, said:
There can be no doubt that a general rise in the level of money incomes which significantly outstripped the rate of growth would be incompatible with achieving our objective of a high wage, high productivity, low unit cost economy, and that means that we can't have it unless we earn it.
That is the point that we have consistently made.
I say again that it is nonsense and ridiculous for the hon. Member for Coventry, South-East (Mr. Nellist) to suggest that Conservative Members have a pathological hatred of youth. That was a stupid statement. I suggest that it shows yet again that the Labour party is out of touch with reality.

Mr. Prescott: After listening to the debate, I am not sure whether this is a case of a pathological hatred of youth or the economic illiteracy of those Conservative Members who spoke.
The statement from which the Minister has just quoted and to which the Paymaster General gave a great deal of attention is about productivity, earnings and wages. It is the level of investment in those areas that is crucial. If he looks at the OECD's figures, he will find that Britain is better only than Portugal in its level of investment manufacturing out of the 24 countries, and this is below the level of 1979. The Minister needs to consider what brings about jobs and determines wages, but he has not done so in this case.
The Paymaster General talks about the salaries of young people. Apparently £45 is far too much. I wonder what he did about the banisters' recent claim for an increase in income. I wonder what advice the Paymaster General has given to the new top salaries review that the Government are holding back at present regarding the income recommendations—this, presumably, to be presented to the House after the Bill has been dealt with. From an examination of the Cabinet minutes on these matters, it will be observed that the right hon. Member for Waveney (Mr. Prior) rejected this course of action. He would have been ashamed to hear the debate today.
Let us make it clear that we are denouncing our international obligations. We are the only country out of 94 countries to denounce our international obligations. The Labour party will restore those international

obligations. We will bring back the fair wages clause and a form of wages councils that guarantee rates. We are against the sweat-shop industries that are becoming a common feature after seven years of this Government. From all the evidence that we have seen of the young workers' scheme with its reduction of wages, no extra jobs have been created.
As to the removal of the fair wages clause, hon. Members should talk to the Barking hospital cleaners. The number of people employed was reduced and the employees worked a lot harder, but they got less pay and fewer holidays. That is what this is about, driving down the wages of the low paid. It is also a question of job substitution; it is skivvy-scheme YTS that will take the place of the adult worker in wages council industries.
In 12 months' time, we will see the results of the policy. Then Labour's policy of a fair wages strategy that we outlined yesterday will be relevant, and will return a Labour Government. Therefore, we will vote for the clause in the belief that it will give a right and just return to young people.

Question put, That the clause be read a Second time:—

The House divided: Ayes 168, Noes 254.

Division No. 181]
[6 pm


AYES


Adams, Allen (Paisley N)
Eastham, Ken


Alton, David
Edwards, Bob (W'h'mpt'n SE)


Archer, Rt Hon Peter
Evans, John (St. Helens N)


Ashley, Rt Hon Jack
Faulds, Andrew 

Ashton, Joe
Field, Frank (Birkenhead)


Atkinson, N. (Tottenham)
Fisher, Mark


Bagier, Gordon A. T.
Flannery, Martin


Banks, Tony (Newham NW)
Forrester, John


Barnett, Guy
Foster, Derek


Barron, Kevin
Foulkes, George


Beckett, Mrs Margaret
Fraser, J. (Norwood)


Bell, Stuart
Freud, Clement


Benn, Rt Hon Tony
George, Bruce


Bermingham, Gerald
Godman, Dr Norman


Bidwell, Sydney
Gould, Bryan


Blair, Anthony
Hamilton, James (M'well N)


Boothroyd, Miss Betty
Hamilton, W. W. (Fife Central)


Boyes, Roland
Hardy, Peter


Bray, Dr Jeremy
Harrison, Rt Hon Walter


Brown, Gordon (D'f'mline E)
Hattersley, Rt Hon Roy


Brown, Hugh D. (Provan)
Haynes, Frank


Brown, N. (N'c'tle-u-Tyne E)
Healey, Rt Hon Denis


Buchan, Norman
Heffer, Eric S.


Caborn, Richard
Hogg, N. (C'nauld &amp; Kilsyth)


Callaghan, Rt Hon J.
Holland, Stuart (Vauxhall)


Callaghan, Jim (Heyw'd &amp; M)
Home Robertson, John


Campbell-Savours, Dale
Hoyle, Douglas


Carter-Jones, Lewis
Hughes, Dr Mark (Durham)


Clark, Dr David (S Shields)
Hughes, Robert (Aberdeen N)


Clarke, Thomas
Hughes, Roy (Newport East)


Clay, Robert
Hughes, Sean (Knowsley S)


Clelland, David Gordon
Janner, Hon Greville


Clwyd, Mrs Ann
John, Brynmor


Cohen, Harry
Kaufman, Rt Hon Gerald


Cook, Frank (Stockton North)
Kennedy, Charles


Cook, Robin F. (Livingston)
Kilroy-Silk, Robert


Corbyn, Jeremy
Kinnock, Rt Hon Neil


Cox, Thomas (Tooting)
Kirkwood, Archy


Craigen, J. M.
Lambie, David


Cunningham, Dr John
Lamond, James


Davis, Terry (B'ham, H'ge H'l)
Leadbitter, Ted


Deakins, Eric
Leighton, Ronald


Dobson, Frank
Lewis, Terence (Worsley)


Dormand, Jack
Litherland, Robert


Douglas, Dick
Lloyd, Tony (Stretford)


Dubs, Alfred
Lofthouse, Geoffrey


Duffy, A. E. P.
McDonald, Dr Oonagh


Dunwoody, Hon Mrs G.
McKay, Allen (Penistone)


Eadie, Alex
McKelvey, William






McTaggart, Robert
Robertson, George


Madden, Max
Rogers, Allan


Marek, Dr John
Rooker, J. W.


Marshall, David (Shettleston)
Ross, Ernest (Dundee W)


Martin, Michael
Rowlands, Ted


Mason, Rt Hon Roy
Ryman, John


Maxton, John
Sedgemore, Brian


Maynard, Miss Joan
Shore, Rt Hon Peter


Meacher, Michael
Short, Ms Clare (Ladywood)


Meadowcroft, Michael
Short, Mrs R.(W'hampt'n NE)


Michie, William
Silkin, Rt Hon J.


Mikardo, Ian
Skinner, Dennis


Miller, Dr M. S. (E Kilbride)
Smith, C.(Isl'ton S &amp; F'bury)


Morris, Rt Hon A. (W'shawe)
Smith, Rt Hon J. (M'ds E)


Morris, Rt Hon J. (Aberavon)
Snape, Peter


Nellist, David
Spearing, Nigel


Oakes, Rt Hon Gordon
Steel, Rt Hon David


O'Brien, William
Stewart, Rt Hon D, (W Isles)


O'Neill, Martin
Strang, Gavin


Orme, Rt Hon Stanley
Straw, Jack


Park, George
Thomas, Dafydd (Merioneth)


Parry, Robert
Thorne, Stan (Preston)


Patchett, Terry
Tinn, James


Pavitt, Laurie
Torney, Tom


Pendry, Tom
Wareing, Robert


Penhaligon, David
Weetch, Ken


Pike, Peter
Welsh, Michael


Powell, Raymond (Ogmore)
Wigley, Dafydd


Prescott, John
Williams, Rt Hon A.


Radice, Giles
Wilson, Gordon


Randall, Stuart
Winnick, David


Raynsford, Nick
Wrigglesworth, Ian


Redmond, Martin
Young, David (Bolton SE)


Rees, Rt Hon M. (Leeds S)



Richardson, Ms Jo
Tellers for the Ayes:


Roberts, Allan (Bootle)
Mr. Don Dixon and


Roberts, Ernest (Hackney N)
Mr. Lawrence Cunliffe.


NOES


Aitken, Jonathan
Burt, Alistair


Alexander, Richard
Butler, Rt Hon Sir Adam


Amery, Rt Hon Julian
Butterfill, John


Amess, David
Carlisle, John (Luton N)


Arnold, Tom
Carlisle, Kenneth (Lincoln)


Ashby, David
Carttiss, Michael


Aspinwall, Jack
Chalker, Mrs Lynda


Atkins, Rt Hon Sir H.
Chapman, Sydney


Atkins, Robert (South Ribble)
Chope, Christopher


Atkinson, David (B'm'th E)
Clark, Dr Michael (Rochford)


Baker, Rt Hon K. (Mole Vall'y)
Clark, Sir W. (Croydon S)


Baker, Nicholas (Dorset N)
Clarke, Rt Hon K. (Rushcliffe)


Baldry, Tony
Clegg, Sir Walter


Banks, Robert (Harrogate)
Cockeram, Eric


Batiste, Spencer
Colvin, Michael


Bellingham, Henry
Coombs, Simon


Bendall, Vivian
Cope, John


Bennett, Rt Hon Sir Frederic
Couchman, James


Benyon, William
Cranborne, Viscount


Best, Keith
Critchley, Julian


Bevan, David Gilroy
Crouch, David


Biffen, Rt Hon John
Currie, Mrs Edwina


Biggs-Davison, Sir John
Dickens, Geoffrey


Blackburn, John
Dorrell, Stephen


Body, Sir Richard
Dover, Den


Bonsor, Sir Nicholas
du Cann, Rt Hon Sir Edward


Boscawen, Hon Robert
Durant, Tony


Bottomley, Mrs Virginia
Dykes, Hugh


Bowden, A. (Brighton K'to'n)
Eggar, Tim


Bowden, Gerald (Dulwich)
Evennett, David


Brandon-Bravo, Martin
Eyre, Sir Reginald


Bright, Graham
Fallon, Michael


Brinton, Tim
Farr, Sir John


Brooke, Hon Peter
Favell, Anthony


Brown, M. (Brigg &amp; Cl'thpes)
Finsberg, Sir Geoffrey


Browne, John
Fookes, Miss Janet


Bruinvels, Peter
Forman, Nigel


Bryan, Sir Paul
Forth, Eric


Buck, Sir Antony
Fox, Marcus


Budgen, Nick
Freeman, Roger


Bulmer, Esmond
Fry, Peter





Gale, Roger
Malins, Humfrey


Galley, Roy
Maples, John


Gardiner, George (Reigate)
Marland, Paul


Gardner, Sir Edward (Fylde)
Marlow, Antony


Garel-Jones, Tristan
Mates, Michael


Glyn, Dr Alan
Mather, Carol


Goodhart, Sir Philip
Mayhew, Sir Patrick


Goodlad, Alastair
Mellor, David


Gorst, John
Merchant, Piers


Gow, Ian
Meyer, Sir Anthony


Grant, Sir Anthony
Miller, Hal (B'grove)


Greenway, Harry
Mills, Iain (Meriden)


Gregory, Conal
Mitchell, David (Hants NW)


Griffiths, Sir Eldon
Moate, Roger


Griffiths, Peter (Portsm'th N)
Montgomery, Sir Fergus


Ground, Patrick
Moynihan, Hon C.


Grylls, Michael
Mudd, David


Gummer, Rt Hon John S
Murphy, Christopher


Hampson, Dr Keith
Neale, Gerrard


Hanley, Jeremy
Nelson, Anthony


Hannam, John
Neubert, Michael


Hargreaves, Kenneth
Newton, Tony


Harris, David
Nicholls, Patrick


Haselhurst, Alan
Norris, Steven


Hawkins, C, (High Peak)
Onslow, Cranley


Hawkins, Sir Paul (N'folk SW)
Oppenheim, Phillip


Hawksley, Warren
Osborn, Sir John


Hayes, J.
Ottaway, Richard


Hayhoe, Rt Hon Barney
Page, Sir John (Harrow W)


Hayward, Robert
Page, Richard (Herts SW)


Heathcoat-Amory, David
Patten, J. (Oxf W &amp; Abgdn)


Heddle, John
Pattie, Geoffrey


Hickmet, Richard
Pawsey, James


Hicks, Robert
Peacock, Mrs Elizabeth


Hill, James
Percival, Rt Hon Sir Ian


Hind, Kenneth
Porter, Barry


Hogg, Hon Douglas (Gr'th'm)
Portillo, Michael


Holland, Sir Philip (Gedling)
Powell, William (Corby)


Holt, Richard
Powley, John


Hordern, Sir Peter
Price, Sir David


Howard, Michael
Proctor, K. Harvey


Howarth, Alan (Stratf'd-on-A)
Raffan, Keith


Howell, Rt Hon D. (G'ldford)
Rathbone, Tim


Howell, Ralph (Norfolk, N)
Renton, Tim


Hubbard-Miles, Peter
Rhodes James, Robert


Hunt, David (Wirral W)
Ridley, Rt Hon Nicholas


Hunter, Andrew
Robinson, Mark (N'port W)


Irving, Charles
Roe, Mrs Marion


Jessel, Toby
Rossi, Sir Hugh


Johnson Smith, Sir Geoffrey
Rost, Peter


Jones, Gwilym (Cardiff N)
Sainsbury, Hon Timothy


Jones, Robert (Herts W)
Sayeed, Jonathan


Kershaw, Sir Anthony
Shaw, Giles (Pudsey)


Key, Robert
Shaw, Sir Michael (Scarb')


Knight, Greg (Derby N)
Shepherd, Colin (Hereford)


Knight, Dame Jill (Edgbaston)
Skeet, Sir Trevor


Knowles, Michael
Smith, Sir Dudley (Warwick)


Knox, David
Soames, Hon Nicholas


Lamont, Norman
Spencer, Derek


Latham, Michael
Squire, Robin


Lawler, Geoffrey
Stanbrook, Ivor


Lawrence, Ivan
Steen, Anthony


Lee, John (Pendle)
Stevens, Lewis (Nuneaton)


Leigh, Edward (Gainsbor'gh)
Stewart, Andrew (Sherwood)


Lennox-Boyd, Hon Mark
Stokes, John


Lewis, Sir Kenneth (Stamf'd)
Stradling Thomas, Sir John


Lightbown, David
Sumberg, David


Lilley, Peter
Taylor, Teddy (S'end E)


Lloyd, Ian (Havant)
Tebbit, Rt Hon Norman


Lloyd, Peter (Fareham)
Temple-Morris, Peter


Lord, Michael
Thomas, Rt Hon Peter


Lyell, Nicholas
Thompson, Donald (Calder V)


McCrindle, Robert
Thompson, Patrick (N'ich N)


MacGregor, Rt Hon John
Thornton, Malcolm


MacKay, Andrew (Berkshire)
Trippier, David


Maclean, David John
Wakeham, Rt Hon John


McLoughlin, Patrick
Walker, Rt Hon P. (W'cester)


McNair-Wilson, M. (N'bury)
Waller, Gary


McNair-Wilson, P. (New F'st)
Walters, Dennis


Major, John
Ward, John






Wardle, C. (Bexhill)
Winterton, Nicholas


Watts, John
Wolfson, Mark


Wells, Bowen (Hertford)
Wood, Timothy


Wheeler, John
Yeo, Tim


Whitfield, John



Wiggin, Jerry
Tellers for the Noes:


Wilkinson, John
Mr. Archie Hamilton and


Winterton, Mrs Ann
Mr. Francis Maude.

Question accordingly negatived.

New Clause 3

CLOTHING INDUSTRY

'The Clothing Manufacturing, Retail Bespoke Tailoring, Cap and Millinery and the Made-Up Textiles Wages Councils shall he excluded from the provisions of Part II of the Bill except that the provisions of Clause 22 shall apply.'.—[Mr. Merlyn Rees.]

Brought up, and read the First time.

Mr. Merlyn Rees: I beg to move, That the clause be read a Second time.
I spoke on Second Reading but not in Committee about my interest in clothing and textiles—

Mr. Holt: On a point of order, Mr. Deputy Speaker. You appear to have called new clause 3, without mentioning the other amendments to be taken with it. Are we simply discussing new clause 3?

Mr. Deputy Speaker (Mr. Ernest Armstrong): I accept the hon. Gentleman's point. With new clause 3 it will be convenient also to discuss the following: New clause 7—Hotel and catering industry—
'The hotel and catering trades shall be exempted from Part II of the Act and wages councils in these sectors shall retain existing powers.'.
New clause 8—Retailing and distribution—s
'The retailing and distribution trades shall be exempted from the provisions of Part II of the Act and wages councils in these sectors shall retain existing powers.'.
Amendment No. 55, in clause 12, page 12, line 4, at beginning insert—
'With the exception of the powers conferred on the clothing manufacturing, retail bespoke tailoring, cap and millinery and the made-up textiles wages councils.'.
Amendment No. 56, in clause 12, page 12, line 4, at beginning insert—
'With the exception of the powers conferred on wages councils setting conditions in the hotel and catering trades.'.
Amendment No. 57, in clause 12, page 12, line 4, at beginning insert—
'With the exception of power conferred on wages councils setting conditions for the retailing and distribution trades.'.

Mr. Rees: My interest in clothing and textiles is not new. For nearly 25 years I have represented an area of South Leeds where clothing was a major industry. The Burtons empire used to have a manufacturing base in Leeds, but that has now gone. Leeds also had the Fifty Shilling Tailors. I am sure that some hon. Members bought their first suits from such firms.
Clothing was a major industry in my area, and my prime motive in moving the new clause, is to alert the Government to the problems faced by Leeds and other textile towns nearby in the north, in the east midlands and in Leicester.
Some months ago I was prompted, in view of the problems facing the clothing and textile industry in relation to the wages councils, to table an early-day motion. It was signed by 186 people. That is not an

insignificant number. I stress its main points to the Minister. I believe that it expresses the wider issues which have a bearing on the precise problems about wages councils in the Bill. The motion states:
That this House, noting the widespread concern within the clothing industry at the Government's Wages Council proposals which would severely affect vulnerable workers, including many employees of small companies, ethnic minority workers, homeworkers and young workers generally"—
the motion led me to make a point which the Pay master General took up on Second Reading when I made a brief intervention—
further noting the recent report on the industry by the Department of Applied Economics at Cambridge University, which suggested that rather than destroying jobs, wage increases between 1950 and 1980 actually expanded clothing employment, and noting the contribution of the Clothing Manufacturing Wages Council (Great Britain),"—
I notice that we are not dealing with Northern Ireland now—
the Clothing Manufacturing Wages Councils (Northern Ireland) and the other clothing wages councils to good industrial relations in the industry which is helping to provide conditions under which the advanced sector of the industry can invest so that the United Kingdom clothing industry remains internationally competitive, accordingly calls on the Government to abandon its present proposals to reduce the scope and powers of the clothing wages councils.
That early-day motion did not get anywhere. As well as representing Leeds, South—which is a clothing industry area—I also now represent Morley, which is a textile town. At least, it was a textile town, but it is no longer. Textiles have almost disappeared from it during the past 25 or 30 years and that is not simply the Government's fault. My right hon. Friend the Member for Wakefield (Mr. Harrison), who is present today, also represents a town in west Yorkshire which contains a clothing and textile industry.
New clause 3 deals with
Retail Bespoke Tailoring, Cap and Millinery and the Made-Up Textiles Wages Councils.
6.15 pm
All these councils are in the same general boat although there are differences of approach between them, a point that I have discovered after examining them and after receiving advice from various sources. I shall concentrate now on clothing and textiles.
I shall first clarify clause 22. New clause 3 provides that clause 22 will remain in the Bill. I would like the Minister to clarify certain points about clause 22 even though that clause was dealt with in Committee. In fact, I believe that clause 22 was not dealt with adequately in Committee. There was no discussion on that clause in Committee and it was agreed to without a Division because it makes a director, manager, secretary or similar officer of a limited company, or a person purporting to act in such a capacity, liable for offences under part II of the Bill if that person consented to the offence or connived in it, or if the offence was due to that person's neglect. The similar provision in the Wages Councils Act 1979—and we are dealing with the 1979 Act now, not the Truck Act 1831—is limited to liability or a failure to return accurately completed questionnaires issued by the wages inspectorate.
Clause 22, as I read it, would give the inspectorate added powers to pursue fly-by-night employers. The clothing industry and its associated industries are not short of fly-by-night employers. I could give examples of the failure of the inspectorate to recover money that they assess is due to clothing workers.
A report by the factory inspectorate, which the Minister will have access to, on 300 clothing factories published in February 1985 observed:
There is a higher turnover of employers in the clothing industry than in any other.
I could develop that point. However, we need to have clause 22 in the Bill. It gives extended powers to the inspectorate. However, I wonder whether the powers will be extended. My hon. Friends argued in Committee that the inspectorate now will have extended powers. The Minister did not reply to that argument. Do I understand that, because no reply was made, clause 22 does give extended powers to the inspectorate? I hope that the Minister will clarify that when he replies. From the Committee record, I believe that there are extended powers because the Minister would have contradicted that if it was not true.

Mr. Trippier: If I understand the right hon. Gentleman correctly, he is referring to section 24(6) and (7) of the 1979 legislation. If that is correct, the wording is virtually identical. If not, if he will clarify the matter I shall carry out the necessary research and try to reply to his point in some detail later.

Mr. Rees: It is section 24(6) and (7) of the Wages Councils Act 1979. When the Bill was in Committee, the clause was approved without debate, but when Labour Members referred generally to the extended powers they were not told that they had it wrong and that there are not extended powers. Is that what the Minister is saying?

Mr. Trippier: Yes, but I shall check that.

Mr. Rees: I thank the Minister very much. That is the first point and it shows the worth of a Report stage.
When I spoke during the Second Reading debate there was some badinage, as happens on legislation of this kind, about a report commissioned by the National Union of Tailors and Garment Workers. That was once a powerful union in Leeds, but it is not so powerful any more because there are not nearly as many people in the clothing industry in Leeds. However, it is an efficient union.
On Second Reading I referred to the fact that the research carried out by the department of applied economics at Cambridge showed that when pay goes up as a result of the activities of the wages council, job opportunities are expanded. That may seem extremely strange, particularly in the light of what the Paymaster General said just now. He seems to believe in an over-simplistic scenario on the effect of pay increases. He seems to think that if pay goes up, fewer people will be employed. There may be cases where that happens. That must be the case under certain conditions, but that cannot be the complete story.
The department of Employment's research paper, instituted by the Minister and replied to by the Department of applied economics, concluded that the clothing industry had fallen because of the increase in minimum rates. That was refuted not only by the unions but by the employers.
The independent examination by the department of applied economics in October 1985 countered that argument. The Paymaster General called the report in aid so I feel disposed to develop this argument because it underlines what is implicit in the Bill. The report said that the wrong figures were used in the study. Clothing and

footwear figures were used instead of those for clothing. For females the Department's figures for minimum rates were incorrect. For males April minimum rates and October earnings were used instead of figures for rates and earnings in the same month. Foreign competition—we know about that in Leeds—was measured by the ratio of clothing retail prices to clothing wholesale prices. The clothing wholesale prices index was also used to calculate real minimum rates.
The Department assumed that there were always more workers willing to work in the industry for the wages available than employers wanted. That is implicit in what the Paymaster General said today. I do not find that so in my constituency. The Department assumed that employers did not substitute cheaper female labour for male employment. The Department's analysis was inadequate.
To summarise, the view of the department of applied economics was that available statistics show that the industry was short of labour for most of the period, and that the only way to get more labour into the industry was to have higher wages. Secondly, it found that the obvious explanation for the loss of jobs is foreign competition in the form of cheap imports. That is certainly the case in Leeds. I can give the Minister chapter and verse. A firm such as Maenson, formerly May and Sons of the 1860s and 1870s, eventually bought by the GUS empire, was shut down in Leeds when the pound went the wrong way and led to increased foreign competition. Given that background we want the wages councils to be excluded from the provisions of part II in the way that I describe in the new clause.
A problem in the industry arises from the high proportion of young people. Therefore, I want to deal with them. Let us not run away with the idea that young people in the clothing industry are waiting to go to the polytechnic or to Oxford university, or wherever, to read modern greats. The labour market is not a wide market that is equal; it is a series of different markets for different sorts of people.
The majority of young people entering the clothing industry undergo a fairly short period of training. As I understood the Paymaster General earlier, he was talking as though there was five years of intensive training with certificates at the end. From my experience over the past 25 years and the advice that I have been given, training is short. Then people go straight on to incentive schemes. Many of the young people are just as productive and, by the very nature of nimble fingers, more so than workers with long experience in the industry. As incentive workers, they are paid according to output, not age. If they are less productive, they automatically earn less. The Government's proposals would deem young workers not fully productive for five years. Anyone with a knowledge of the clothing industry will know that that is not the case. There is no evidence to support the Government's assertion that the extremely low rates which apply to young workers have restricted the recruitment of young trainees.
Let me deal now with the wider issue of incentive workers and holiday entitlement. The two most serious immediate consequences of part II—this is how I am advised it will affect my area, and, no doubt, other areas where people are involved in the clothing industry—will be the loss of the statutory right to holidays and the loss of the statutory right of incentive workers to be paid the minimum as a fallback rate. The holidays are of particular


importance to women workers who often do two jobs, one at home and one at work. Contractual rights to holidays are of great importance in the socio-economic scene.
If one goes by television, the modern novel and the way people write today, one would think that all that Mr. Winston Churchill did in 1908 for sweated workers and people working at home was a thing of the past, but it is not. It is important that the Government realise that the world does not end at the Watford gap. There is still an industrial north. It is not the industrial north that it was, but the Government will keep bringing forward legislation that assumes that everywhere is like Guildford and Dorking, but it is not. There is a different part of the country.
The Government do not understand that some of the old methods and ways of industry still exist. Those of us who represent seats in the north, who live in London during the week and go home at the weekend, realise more than most the two worlds in which we live. The Government, led by the Prime Minister, tend to look at the world as if there had been profound changes and the economic ethos of the north has disappeared. Incentive workers could legally earn less than the minimum rate, which is less than £7 a week. That is why the new clause is justified.
6.30 pm
I have not dealt with other wages councils, but it goes without saying that these problems apply to them too. No doubt my hon. Friends will mention them. I assume that we are wasting our time moving new clauses if the aim is to win. But perhaps our words will have some effect on the Minister and his Department. He should look at unfair competition and at the decline in the clothing industry, not only in the past 35 to 40 years, but in the past 10 years. The figures of employment are falling all the time. The industry has great problems. We shall not see again the totals that the clothing industry once had. In some ways, I am glad, because the industry was not perfect. It did not supply the right working conditions. Changes are taking place, but training and higher wages are still needed. The Government have made the mistake of changing the wages council for the clothing industry and others.
Long before I went to live in Leeds, and when I was serving in the RAF during the war, the phrase "gone for a Burton" was used. It meant that someone had had it. I often wondered where it came from. Some people say it, meaning that they have gone for a Burton ale. But I looked up that phrase again today and it is suggested that when aircrew or others trained in Blackpool and were learning morse code, they had to go to a nearby former Burtons shop to do their test. If they failed, they were flunked, and so they had "gone for a Burton".
In Leeds, Burtons has gone for a Burton. It does not produce a thing. Unless the Government help the clothing industry, it will all go for a Burton. The Bill shows a singular lack of understanding of the clothing industry's problems, and I commend the new clause to the House.

Mr. Roger Freeman: I listened with great interest to the speech of the right hon. Member for Morley and Leeds, South (Mr. Rees), as he clearly has great experience and important constituency interests. My constituency of Kettering is in Northamptonshire, in the midlands. There are perhaps 250 or 300 textile employees concentrated in three large firms. I appreciate that the

conditions there are probably very different from those in some of the towns and cities that Labour Members may describe.
I have not received any representations about the Bill from the major employers in my constituency, who are in footwear manufacture and the making of leather handbags. However, I have received representations from the clothing industry. I have tried to understand the reason for that difference. Incidentally, I pay tribute to Mrs. Davies, the vice-chairman of the National Union of Tailors and Garment Workers, who has patiently lobbied me for the past six or 12 months. Indeed, she was one of those who yesterday presented a petition in Downing street. For many months, I listened with care and attention to the arguments that she made, not about conditions in my constituency but in the wider national context.
The central fear of some of the industry's employees is that wages for those under the age of 21 will be cut, with the resources being transferred to the owners of companies, and distributed in profits and dividends. They fear that young people will be exploited. Judging by the conversations that I have had in my constituency, I do not believe that to be so, although my constituency may not be typical.
I believe that fear to be misplaced for two reasons. First, profitability in the industry is generally low. We well understand the arguments used in favour of toughening the multi-fibre arrangement and helping to introduce sensible measures of protection for the industry. The Minister has a constituency with substantial footwear interests. Before he became a Minister, he was one of the officers of the all-party Back-Bench footwear committee. He understands the unfair conditions facing the footwear industry, which also face the clothing and textile industries. Employers will not deliberately cut the wages of those working in the industry in order to increase distributed profits, because the profits are simply not there.
Secondly, I have taken the trouble to talk to employers about the effect of reducing national insurance contributions. The evidence is that, with lower employment costs, particularly for those aged under 21, employers are prepared to take on extra labour. Perhaps not many are involved, but that evidence still exists I assume that the hon. Member for Truro (Mr. Penhatigon) spoke for the alliance. I entirely agreed with what he said. He generally supported the argument that, with greater flexibility of wage rates for those aged under 21, On balance, employment prospects would be enhanced. Given last year's Budget, that must be borne out by the evidence.
I agree with the right hon. Member for Morley and Leeds, South about the inspectorate. He got things exactly right, and I hope that the Minister will reply to that point. It is important that the inspectorate should have not only sufficient numbers, but the organisation and determination to make sure that the law is properly enforced.
However, I generally welcome the Bill. I do not agree with the fears expressed by those who support the new clause, and I am prepared to support the Bill as it is.

Mr. Ian Mikardo: You have grouped together, Mr. Deputy Speaker, a new clause that deals with what might broadly be called the needle trades, a new clause that deals with the hotel and catering trades, and a new clause that deals with the retail and distribution


trades. It is entirely logical to group them together, as they have much in common. For example, the workers in all three industries are the most vulnerable workers, and those who will suffer most from the Bill's provisions.
Those workers will suffer most partly because they are relatively defenceless. In all three industries there are some large establishments and employers and I shall come to that point later. But all three industries also have many workplaces that employ very few people. Sometimes they employ virtually no one, as the work is done by homeworkers. As few people are employed, they are very difficult to unionise. Moreover, as my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) pointed out, those working in the industry are often on the move. In all three trades, the turnover of labour is much faster than in, say, the engineering industry. Thus, the workers are not unionised. They are vulnerable and low paid, and work in small establishments that are rarely visited by an inspector, so the employer can get away with almost anything. I shall not weary the House with instances, but many of those quoted in Committee involved serious abuse of workers.
I smiled to myself when I heard the speech of the Paymaster General, which was based on the assumption that there is a free bargain between employers and workers in a country with 4 million unemployed. Of course there is not a free bargain. The Government say that there can be recourse to an industrial tribunal, but that does not mean much, because in the sweatshops in east London an employer can break the law because he knows that a worker will not go to a tribunal in case he is sacked.
Anyway, not all workers have that recourse. The so-called safeguards about which Ministers keep talking do not exist; hence the vulnerability of those three industries.
I want to say a word about each of the three industries to ensure that they are properly covered. My right hon. Friend the Member for Morley and Leeds, South spoke about great factories like Burtons. There were a few of those in east London—Simpsons, Polikoffs, and so on. However, the overwhelming majority of the needle trade in London is in small sweatshops run in exactly the same way and often in exactly the same premises as at the turn of the century. My father worked in them before this century began. There are the same sweatshop conditions now as at the beginning of the century; history is repeating itself. There is no protection for the workers.
My right hon. Friend asked why we did not have a great discussion in Committee about clause 22 to determine whether it provided extended powers for the inspectorate. It does not matter tuppence whether the clause does or does not give extended powers to the inspectorate because the inspectorate is vanishing and is almost out of existence. It is hideously understaffed, hideously overworked and hideously inadequate. Some establishments in my constituency have been in operation for 12 years but have not had an inspector across the front door. That is how frequently the inspector visits. Yet, simultaneous with the passage of the Bill, the Government are cutting the number of inspectors. In future, inspection will be much less frequent and much more perfunctory—and it is pretty perfunctory now in many cases.
Inspectors investigate whether proper wage rates are being paid by looking at the wages book. They assume that workers receive the amounts written in the wages book.

I can tell the House, from first-hand experience, that that assumption is not universally valid. I suppose that it is valid in the majority of cases, but not in all. In the sort of cases that I have been describing, the only way to find out what Joe or Suzy Bloggs is being paid is to ask them. Sometimes the answer is very different from what is written in the wages book.
My next concern is about the welfare and catering trades. I accept that there are still one-man or two-man cafés, but during the past 10 or 20 years there has been a huge concentration with the establishment of hotel chains—one has swallowed up another and then a third and a fourth. There has also been the growth of huge fast food chains—the Wimpys, McDonalds, Kentuckys, Pizza Huts and so on. Those chains are hugely profitable: the employers are making enormous profits. Because of the enormous profits, shares in some of the public companies have appreciated hugely during the past few years, and virtually all of them on sweated rates of pay. The huge profits and huge capital gains made by shareholders have been achieved by workers being paid the absolute minimum.
The Government do not mind that happening because many of those companies donate some of their profits to Conservative party funds—

Mr. Trippier: No.

Mr. Mikardo: Oh yes. If the Minister doubts that, I am prepared to send him a list of companies. If he challenges me, I will get my list and quote it at length later. That might prevent the Minister from making any more speeches, because it is a very long list.
In the retail distribution industry there has been considerable concentration with the growth of supermarkets and other specialised chains such as the carpet and DIY chains. There is constant pressure not only to hold down wages, but to lower them. In an earlier debate the Paymaster General spoke about a drive to increase wages. He could not have been talking about this Bill because its purpose is to decrease wages.
In all the three groups I have mentioned there are vulnerable workers who will be abused even more than they are now. Although the three groups appear to be different each from the other, there is a common case for all of them, which is why it was sensible to group them. It is an overwhelming case for the exclusion of each of the three industries from the Bill. I shall therefore support the new clause in the Lobby.

Mr. Holt: Part II of the Bill is the part on which I should support the Government much more fully than I did on part I, but I hesitate to do so because I think that, as with part I, they do not have it quite right. The Government have not abolished all wages councils, and they should either have done so or left them alone. To tinker with them is the worst of all worlds.
If the Government had read the evidence given to the Institute of Personnel Management when it surveyed all sectors of industry and commerce on that issue, they swould have seen very few friends for wages councils. They are not liked by either side—employer or employee. Indeed, the evidence shows that seven or eight years ago the TUC was in favour of their abolition, and we can understand why. The industries with the lowest


paid workers are those that come within the wages councils; by definition, wages councils tend to depress wage rates. There are no wages councils for many of our major industries, and if there were none at all the natural process of market forces would operate. However, we have now an unnatural aspect of market forces introduced by wages councils on a set of criteria that are in themselves often meaningless.
The members of wages councils make decisions without having the responsibility of carrying them out. They do not have to find the money to pay the wages that they set, and they can deliberately opt for a low wage settlement to avoid the hassle that accompanies protracted negotiations. Neither side of industry is done any favours by having wages councils.
The hon. Member for Bow and Poplar (Mr. Mikardo) observed that there is not strong trade unionism in the wages councils sector. That was part of the TUC argument. If the wages council umbrella were removed, the opportunity and the impetus of the unorganised to become members of trade unions and to be organised would be greater. One of the major reasons why workers in the wages council sector do not join trade unions is that they take the view that they are covered by the councils and that the wages set by these arbitrary bodies is, by and large, what they will receive. By definition, the councils keep workers at the lower end of the pay scale and do not provide a free opportunity for both sides of industry properly to negotiate for a set of wages, terms and conditions similar to that which exists in other industries.

Mr. Tony Banks: The hon. Gentleman is wrong in two respects. First, previous TUC opposition to wages councils was formulated at a time when we did not have 4·5 million unemployed. Secondly, workers in the areas and industries covered by wages councils have employers who would sack them if they joined a trade union. That is why there have been so many disputes. The employers say, "If you join a trade union, you will go out of the door. There are plenty more people to take your job if you want to go."

Mr. Holt: I understand the hon. Gentleman's first argument as it is one that appears in the report produced by those who subscribe to the Institute of Personnel Management. It is said in that report that the attitudes of the various sides of industry depend very much on the moment when wages councils are discussed.
Are wages councils now what was intended by the late Sir Winston Churchill in 1908? Are conditions now exactly what they were then? I submit that conditions are very different in one strategic sense. In 1908, there was no television and no mass media of the sort that we have now. There were not the communications that are available to us. The underlying theme of 1908 no longer applies. I cannot understand why the Labour party is arguing so vociferously in favour of wages councils when they have not improved the conditions of the workers whom they cover and have covered over the years when comparisons are made with other industries. That is why I think that the Government are making a mistake even to have the minimum clause that is now to be found in the Bill.
We know that the majority of those who are members of wages councils--we went through this in fine detail in Committee—have never worked in industry or

commerce. Three quarters of them have come from academic or legal backgrounds, yet they have been appointed to make wages council decisions and orders. The members of the councils have not come up through the trade union movement.

Mr. Tom Torney: I have a list of members of the retail food trades wages council, and it is clear that the hon. Gentleman does not understand how wages councils are formulated. Their membership is not restricted to university professors or academics. Trade union officials and trade union members sit on wages councils, as do representatives of employers. They try to thrash out a settlement. I appreciate that there are appointed members, and the side that can draw the support of the appointed members wins the day. The order of the retail food trades wages council is a much better one than that which existed before I came to the House 16 years ago, and that has been achieved by trade union representation.

Mr. Holt: I accept that the hon. Gentleman has strong feelings on this issue. However, one of the arguments set out in the consultative document is that the councils have the very tendency which he demonstrated, which is that of the pendulum effect. They swing one way one year and the other way the next. It might be correct and proper if they were to swing one way for several years. As there is a balance on the councils, the members of them are always looking over their shoulders to ensure that they are not criticised by anyone. At the same time, they are not devoting their attention to the industries for which they are responsible. Instead, they are considering the actions and orders of other councils. In effect, they are equating within a narrow band. If there were no wages councils and if rates of pay were not set artificially for the industries that they now cover, without consideration being given to whether companies can pay more or less, the workers could be better off.
The Government's argument is that the changes that are set out in the Bill will increase the number of employees. They argued a couple of years ago that by changing the qualifying period for a case to be taken to an industrial tribunal they would similarly increase the number in employment. I have not seen the evidence of that yet in my constituency. The Government were warned, but they did not listen.

Mr. Deputy Speaker: Order. The hon. Gentleman is being very general in his comments. He should relate his remarks more to the amendments and the new clause.

Mr. Holt: I had referred to wages councils throughout, Mr. Deputy Speaker, until the last passage before you intervened.
Unlike the hon. Member for Bow and Popular, I am sorry that the amendments have been grouped together. If they had remained separate, we could have had three separate debates and could have argued the merits and demerits of the individual industries. One of the bad features of national legislation is that it always brings everything down to a common level. The amendment, will do nothing for the workers in the industries to which they relate other than to maintain the status quo in a weakened form.
I am sorry that the Government have not abolished the wages councils. If their abolition proved to be


unsuccessful, they could be brought back at a later date. Until they are abolished and we go through a period when they do not exist, we shall not know whether we would be better without them. We are to have the worst of both worlds, as we shall have a weakening of the existing system and a half-baked, one-line minimum which in reality will not mean a great deal to those who are covered by the wages councils in the industries to which the amendments relate.

Mr. Greville Janner: The hon. Member for Langbaurgh (Mr. Holt) is living in another world. He does not seem to realise that in the clothing, catering, hotel and retail industries, to which wages council orders apply, workers are disadvantaged and unprotected. They are not members of unions because, on the whole, they are part-timers and/or women employees who do not join unions as readily as men. They are frightened that if they join a union they will lose their jobs. even if they are not especially good ones.
I am dealing with a firm in my constituency—I do not want to name it because negotiations are taking place—from which a group of workers came to my surgery seeking my advice. The members of the group told me that the company does not like unions and added, "If we join a union, we are afraid that we shall lose our jobs. We have mortgages and families. Our jobs are not brilliant, but at least they are jobs." They showed me how they were protected by their contracts of employment. They were notified of a change of contract. The reason given for the change was "management decision". In other words, the days of Attila the Hun have not gone from the factories of Leicester.
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In its own way, the clothing industry in Leicester has performed a miracle in staying alive. I salute the resilience of the work force and some of the managements which, through their efforts, have kept the industry alive. However, all that is left is the remains of a great industry. I remember my father saying in the House that Leicester would never be hit by a recession and that it got through the last one because people cannot do without shoes, clothing, hosiery and knitwear. Father was right about many things, including most of his criticisms of his son, but he was wrong about that. The effects of the recession and of unlimited imports have kept people in the clothing industry at the lowest wage level and have put many of them out of work.
The Government did not abolish the wages councils, as the hon. Member for Langbaurgh (Mr. Holt) would have wished, out of any sense of kindness or compassion, but because many of their supporters in the industries recognised that abolishing wages councils and their orders would invite the cowboys in the industries to undercut them by paying even less then they had to pay under the minimum rates of the wages councils orders. That is why the Government did not get rid of the wages councils. That is why the Government are only prepared to get rid of them in stages. That is why we have had the emasculation of the system rather than its total abolition.
Leicester used to be the second most prosperous city in Europe. Today, unemployment in Leicester is rife. Unemployment in the hosiery industry in my constituency is as high as 60 per cent. The Government have the odd

idea that, if they cut wages further and allow employers in the textile hosiery and retail industries to pay sweatshop wages without conditions, there will be more jobs. They think that employers will be prepared to take on more people if those whom they employ are sweated labour. Labour Members are against sweated labour. We believe that the wages councils regulations provide about the only protection there is against it, especially in periods of high unemployment.
The Leicester Mercury, Leicester's local newspaper, performed a public service by revealing the sweatshop conditions that exist. As my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) said with his usual eloquence, the conditions are made much worse by cutting the strength of the factory safety inspectorate.
The number of sweatshops is growing and the cowboys are moving in. Homeworkers are exploited. The Government, in their pursuit of more jobs, are removing the rights of people who have jobs. That is no way to create employment. As the hon. Member for Langbaurgh said, in connection with another matter when he was stopped by the Chair, that will not work. There has been no improvement in employment because the Government's policy has taken away the rights of those at work. There will be no improvement in employment because the Government are seeking the destruction of the wages councils, if not by a direct route, then by an indirect one.
I support the clause proposed by my right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) because it would remove from the legislation the clothing and textiles industry, which is in deep recession, and would give some hope to the people who work in it that hon. Members understand, as the hon. Member for Langbaurgh does not, the problems under which they so ceaselessly labour.

Mr. Tony Banks: New clause 7 states:
The hotel and catering trades shall be exempted from Part II of the Act and wages councils in these sectors shall retain existing powers.
I am a sponsored member of the Transport and General Workers' Union. Some members of the union will be covered by new clause 7. The hotel and catering sector is the second largest sector covered by wages council protection. Three separate wages councils cover workers in pubs, clubs, licensed hotels, restaurants, cafes and snack bars.
It seems appropriate that the House, the home of the free lunch, should take considerable interest in the conditions that workers experience in the hotel and catering sector. I hope that when hon. Members next enjoy the benefits of a lunch or dinner in one of London's restaurants or hotels, they will think for a moment about the wages and conditions which the workers who have prepared the food, those who have served it, and those who wash up afterwards, must endure. In common with other wages council industries, poor conditions, low pay and poor prospects combine to produce high labour turnover, even in times of high unemployment, in the hotel and catering industry.
Union membership in the industry stands at just 6 per cent. of the national work force. Collective bargaining is confined to workers in a few large hotels and chains. The majority of workers rely directly on the wages councils to protect their wages and conditions. That is the answer to the comments of the hon. Member for Langbaurgh (Mr. Holt). Workers in that sector do not join trade unions


because, if they do, they will be straight out of the door. The industries rely on high turnover and the threat of unemployment, which scare people from joining trade unions.
Although we could, no doubt, find some common ground in saying that there are defects in wages councils, Labour Members accept wages councils now because at least they provide minimal protection for the workers who most desperately need protection. I am looking to the next Labour Government to take a completely different attitude to the protection of workers in the hotel and catering sector. Labour Members have clearly demonstrated that the industry has changed dramatically because of the fast food chains and the importation of American systems.

Mr. Holt: The hon. Gentleman has not participated in the debate up until now. Perhaps he missed the important statement from the Labour Front Bench about what will happen if the Labour Party wins the next general election. The hon. Member for Birmingham, Ladywood (Ms. Short) said that a Labour Government would bring in a national minimum wage. Therefore, the wages councils would be null and void.

Mr. Banks: That does not necessarily follow. I was merely pointing out that, for the moment, we support a wages council system, because at least it provides some minimal level of protection. My right hon. Friend the Member for Morley and Leeds, South (Mr. Rees) said that the Government have not introduced the legislation to force wages up; they have introduced it to force wages down. It is quite remarkable that the Government's philosophy seems to be that the poor should suffer more poverty as a way of inspiring them to greater effort, but the rich should have greater wealth to inspire them. I have not heard of many judges, admirals, generals, consultants, or even politicians, pricing themselves out of jobs, as they take their large wage increases given by central Government. However, in the catering and hotel industry, where wages and conditions are already appalling, the Government want to take away the minimal protection that workers have. That is why I urge the House to support new clause 7.

Mr. Trippier: I am anxious to deal with many of the points raised by the right hon. Member for Morley and Leeds, South (Mr. Rees). Although I shall try to cover some of the points made by other hon. Members, I am sure that the House will understand if I concentrate on the right hon. Gentleman's points, which were specific. The right hon. Gentleman and I share the experience of not having to change money at Watford. Those of us who come from and represent constituencies in the north are aware of what life is like there.
My hon. Friend the Member for Kettering (Mr. Freeman) represents a textile and footwear constituency and I know that much of what the right hon. Member for Morley and Leeds, South said was accurate. It was not conjecture or hypothesis. I agreed with many of his points. On many occasions, there has been all-party support on matters concerning the textile lobby—for example, on renewals of multi-fibre arrangements. Many hon. Members have joined forces, as I did when I was a Back Bencher, to lobby Ministers. There is no difference among us in that respect.
As I tried to point out in Committee, our differences on this issue are political and, to a great degree,

psychological, in that one either accepts what the Government are saying—that those under 21 will be discriminated in favour of as a result of being taker, out of the purview of the wages councils—or one does not. I am not trying to put this bluntly; I am simply saying that one either accepts that view or one does not. We touched on this aspect in the debate on the last series of amendments. No Government in their right mind would go out of their way to do any harm to people under 21. We believe that, as a result of this legislation, we shall increase employment.
My hon. Friend the Member for Kettering put it well. He has experience in a constituency similar to mine of what is going on in industries which employ people who, by any standards, could be said to be low paid. Because we share that experience, we know what it is like.
As I said, the intention of clause 22 was to use the precise wording in the 1979 legislation in this legislation. I spent some time considering this aspect and took the advice of lawyers in the Department. I am not satisfied that my initial intervention during the speech of the right hon. Member for Morley and Leeds, South was correct. I think that he has a point. There are wider powers in the Bill. If that is correct, I am sure that he will be pleased, and I am certainly not sorry about that. I hope that we agree.

Mr. Merlyn Rees: Would it not be a good idea for the hon. Gentleman—I do not want to develop this point now—to help us by advising us on the extent to which the powers have been extended?

Mr. Trippier: I am happy to do that. I am under an obligation to the right hon. Gentleman to make that commitment.
Of the Opposition's contributions, the point with which I disagreed most was made by the hon. Member for Bow and Poplar (Mr. Mikardo). That is a pity, because I have great respect for him. We had many exchanges in Committee. The hon. Gentleman implied, as did some of his hon. Friends—it was unique—that the Bill's intention was to drive wage,,, down. That is not true. Labour Members could argue that that could have happened if the Government had gone down the route of total abolition advocated by my hon. Friend the Member for Langbaurgh (Mr. Holt), but we did not.
I carefully followed the points made by my hon. Friend the Member for Langbaurgh. Today, he developed his argument in a way that differed slightly from his approach in Committee. One would have to be foolish to disagree with him when he says that the wages council system does not appear to have worked. That is not open to conjecture or hypothesis. It is a fact. This Government or any Government would face a dilemma in considering whether they should go for complete abolition or whether they should try to remove youngsters under 21 from the purview of the legislation. Contrary to the comments of the hon. and learned Member for Leicester, West (Mr. Janner), no subterfuge is involved in the Government's intention to keep protection just for those over 21. We were convinced, following the consultation exercise. that protection for adult workers had to remain.
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I am sure that hon. Members listened carefully to my hon. Friend the Member for Langbaurgh. If we scrapped the whole of the wages council system, as he suggested,


we would be taking an incredible risk. Labour Members would never be prepared to take such a risk and, on this occasion, I agree with them. It would be too big a risk.
I return to the point that I made to the right hon. Member for Morley and Leeds, South. One either believes that we are helping youngsters under 21 to obtain jobs and to take that essential first step on the employment ladder, or one does not. We can argue for hours on this subject. Indeed, I suggest that we have already done so in Committee. We are talking about not a slight division but a massive chasm between us. It does not please me to say to the right hon. Member for Morley and Leeds, South that we are talking about a massive divide, but we believe that we are right and that the evidence is that youth employment will increase as a result of the legislation.
We accept—I do not think that any hon. Member mentioned this—that there will be some displacement, and it would be silly to deny that. We have always acknowledged that there would be some displacement, but believe that, on balance, there will be an increase in employment among those under 21 in the wages council industries.
Despite the comments of the right hon. Member for Morley and Leeds. South on clause 22 and his incorporation in the proposed new clause of the provisions of clause 22, I am afraid that, because I do not believe that we can operate two different types of wages council systems, I have to ask the House to reject the new clause.

Question put and negatived.

New Clause 4

SUNDAY WORKING

'Notwithstanding whatever other determinations a wages council may make in respect of remuneration, the council shall fix a premium hourly rate of remuneration in respect of time worked by a worker on a Sunday.'.—[Ms. Clare Short.]

Brought up, and read the First time.

Mr. Torney: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker: Order. The hon. Member cannot move the motion, because he has not tabled the new clause. The motion can be moved formally.

Ms. Clare Short: I beg to move, That the clause be read a Second time.

Mr. Torney: Thank you, Mr. Deputy Speaker. I apologise.
I must first declare an interest. I am sponsored by the Union of Shop, Distributive and Allied Workers. I must say in passing that I was astounded at the apparent lack of knowledge of some Conservative Members about the way in which wages council orders work and how they tick. I should be happy to explain how they work to the appropriate Conservative group. I am sure that I can do that because I served for many years as a full-time officer of my union.
The Government must surely know to their cost that Sunday is special. Despite the Conservative party's huge majority in the House, it was defeated recently on the Shops Bill. That is proof, if ever it were needed, that Sunday is special. The Government's defeat was evidence of the fact that right hon. and hon. Members thought that Sunday was special. Tory Members contributed in no

mean way to the Government's defeat. Sunday is as important a part of the Wages Bill as it is of the Shops Bill. The Wages Bill encroaches on our Sunday just as much as the Shops Bill would have done. Conservative Members cannot have double standards. They defeated their Government then: they should defeat them again.
It has long been established that if a worker is called upon to work on a day that is not a working day, but is a holiday or, as in the case we are discussing, the Sabbath. premium payments should be made. The wages council orders have made it obligatory for such payments to be made by employers to workers called upon to work on the day I described.
Sunday for most people is a day of relaxation. Relaxation is taken in many different ways. Some people favour amateur sports activities, and others may simply wish to rest, perhaps after a hard week's work. Certainly Sunday is a family day when all can be joined in the true spirit of family life and it is also a day for friends. We should never take action which would prevent people from following their democratic right to attend a place of worship. The employer who asks a worker to give up his freedom on a Sunday should be compelled to pay dearly. It is not just a question of workers wishing to increase their earnings. We should make it as expensive as possible for an employer to call upon his employees to work on a Sunday to deter employers from using workers in that way.
Wages council orders were introduced to give protection to workers in depressed industries such as retail distribution, catering and other industries mentioned in the previous debate by many hon. Members, where, through lack of trade union organisation. the workers were unable to seek protection in any other way. In my youth I worked in a shop and I know from experience that without the meagre protection provided by the wages councils I would have been expected to work all hours and all days, including Sundays, for a mere pittance paid weekly.
The introduction of wages councils, while not giving the best conditions to workers in depressed industries, at least provided a basis for better conditions. Wages councils also gave a measure of protection to those workers who were better organised in their trade unions and enabled them to secure better conditions for trade union members.
Wages councils were hailed by the better employers because they had to sell their wares in the same market as bad employers and, therefore, were subject to unfair competition from those bad employers who would not hesitate to exploit workers and force them to work on Sundays without extra payment. Let us not delude ourselves: there are plenty of employers today, certainly in retail distribution which I know so well, who will work their employees on a Sunday without premium payment and will ask them to work unsocial hours if the Bill is passed in its present form.
The Government are not a caring Government. They care for profits, not people. That is shown by the Shops Bill which would have compelled people to work on Sundays. The Shops Bill provided no protection for the conscience of workers and, coupled with the abolition of wages councils and Sunday premiums, would have provided no protection for workers. The Shops Bill would have been aided and abetted by a Wages Bill designed to give greater opportunity for private profit while reducing the standard of life of workers in the lowest paid sections of industry, which includes all forms of retail distribution


and catering. We must add to that the mass unemployment and the Government's attacks on the trade union movement which are all designed to create a low-wage, high-profit economy. Therefore, I ask the Government to withdraw the Bill or hon. Members to defeat it when it is put to the vote.

Mr. Trippier: It may be that the hon. Member for Bradford. South (Mr. Torney) was not present two hours ago when I referred to a booklet written by the Trades Union Congress. It sets out the TUC's views, which are in direct contrast to those of the hon. Gentleman. I shall send the hon. Gentleman a copy of the booklet because he will find that the TUC was not in agreement with the latter part of his speech.

Mr. Torney: Which part?

Mr. Trippier: I am somewhat short of time and I do not want to repeat what I have already said to hon. Members who have been here for all of the debate. I think that that is a fair point. I shall certainly write to the hon. Gentleman.
If new clause 4 and amendments Nos. 60, 61 and 62 to clause 14 were to be accepted. they would give wages councils additional powers which the Government cannot accept.
Under the Bill, the powers of councils are limited to fixing a minimum hourly rate for basic hours and a minimum hourly overtime rate for time worked in excess of the basic hours. If a worker works on a Sunday and that time is in excess of the basic hours laid down by the wages council, the worker will be entitled to the minimum hourly overtime rate for all time worked on that Sunday. The Government strongly believe that the role of wages councils should he restricted to providing only basic protection and that other matters, including holiday payments and differential rates, should be left to be agreed between employers and workers.
There was almost universal support among employers responding to the consultation exercise for the view that the system had to be drastically simplified if it were to remain. We really cannot continue to put businesses in a straitjacket in which they are prevented from negotiating, as freely as possible, the terms and conditions of employment they can afford.
If new clause 4 and the amendments were carried, they would undo one of the prime objectives of the Bill—that of releasing employers from unnecessary burdens and enabling them to give more time to running their businesses.
New clause 5 would enshrine in statute the existing rights of 2·7 million workers in wages council trades. The House will wish to know that many of the arguments advanced by the Opposition in support of this proposal were debated at length in Committee. I am happy to restate the Government's case.
Part II of the Bill is about deregulation and simplification. Wages councils have been able to fix a wide range of terms and conditions. That has had the effect of putting employers in the legal straitjacket I referred to earlier, which has made it all but impossible for them to negotiate with their workers in a way that is more closely tailored to the needs of the business. The majority of employer responses to the consultation exercises were clearly in favour of radical reform if the wages council system were to be retained.
The House will wish to be aware that workers currently employed under a contract incorporating any or all of the terms of existing wages orders can expect their employment to continue on that basis unless the terms of their contract are changed. A contract cannot be changed unilaterally, but either party may seek at any time to change the terms of the contract by agreement.
If an employer seeks to change the terms of a worker's contract and the worker is unwilling to accept the new terms, he can sue in a civil court for breach of contract, whether or not his employment has terminated. As a separate right, the worker can, if he wishes, seek compensation through an industrial tribunal on the ground that he has been constructively dismissed, provided he has at least two years' service. It will be for the tribunal to decide whether the change in contractual terms is sufficient in law to amount to constructive dismissal. These are substantial protections, as the House will recognise.
Part II of the Bill is a balanced measure. It will prevent the detailed prescription of a multiplicity of terms and conditions which are more properly for agreement between employer and worker. At the same time. it preserves the essential core of the system by providing basic protection. The amendments are wholly incompatible with the Government's objectives, and I ask the House to reject them.

Ms. Clare Short: The lack of interest in new clause 4 shows an extreme case of double standards. There was a major revolt in the Conservative party on Sunday trading, when we were told that there was deep concern to keep Sunday special because of people's Christian commitments or humanitarian concern for the family. so the Bill was defeated and the Government were forced to withdraw it. Today, the new clause attempts to minimise the requirement for shopworkers tc work on a Sunday, and no one is interested.
We all agree that some people must work on a Sunday, but most of us think that Sunday work is unfortunate and should be minimised. Anyone who is asked to work on a Sunday should be rewarded accordingly. At the moment shop workers, for example, get double time if they have to work on a Sunday. That makes the work expensive arid means that employers are less likely to demand it. The power to set a premium for Sunday work is being abolished by the Government, which exposes a lack of concern for shop workers and others working on a Sunday. That shows the hypocrisy in the Tory party's stand on Sunday trading. We believe that the power to set a special rate for Sunday should be restored to wages councils so that all workers are not too readily required to work on a Sunday and are adequately rewarded if they are so required.
New clause 5 is also important. It says that those currently employed by wages council industries should not have their conditions of work reduced. The Minister talked about their contract of employment and certain conditions that they might have under their contract, but surely anyone working in a wages council industry has as an implied term of his contract the right to the protection of the conditions that are laid down in the wages council orders. That includes overtime, differential and premium


rates, holiday pay and holiday entitlement. Suddenly, by legislation, the Government are weakening the workers' contracts, and the protection that they have.
It is perhaps widely understood that young people will suffer as a consequence of part II, but it is less well understood that adult workers in wages council industries will suffer gravely. No longer will there be provision for holiday pay or holiday entitlement, or premium payments for night work, Sunday or Saturday work, and so on. No longer will there be differentials for skill. There is concern among employers that that will lead to less training and more poaching, and that they will not be able to hold skilled workers. All that is to be wiped away by the Government in their dogmatic adherence to deregulation, as they call it, but we know that it is all about reducing workers' wages.
Amendments Nos. 60, 61 and 62 attempt to give back to wages councils the power to fix premium rates for Sundays, differential rates and holiday pay. The power would not have to be used by the wages council. Why do the Government not allow wages councils to fix those rates if they think they are beneficial to their industries? The Government talk about freedom of choice and freedom for employers and workers to regulate conditions in their own industries as they see fit. We say that the Government do not mean that. If they did, they would leave to the wages councils the power to fix conditions which they thought best for their own industries. Instead, the Government are wiping away those powers and thus reducing the conditions of work for the poorest workers in the wages council industries.

Question put and negatived.

Schedule 2

CONSTITUTION ETC. OF WAGES COUNCILS

Mr. Trippier: I beg to move amendment No. 59, in page 32, line 4 at end insert—
'(1A) Unless it appears to the Secretary of State to be inappropriate in all the circumstances for this sub-paragraph to apply to the wages council—

(a) the employers' association nominated by him for the purposes of sub-paragraph (1)(a), or
(b) where two or more employers' associations are so nominated, at least one of those associations,
shall be an employers' association appearing to him to be representative of small businesses within the scope of operation of the wages council.'.
In Committee my hon. Friend the Member for Darlington (Mr. Fallon) tabled an amendment to schedule 2 designed to ensure that the voice of small businesses had a chance to be heard when important decisions affecting their prosperity, and even their survival in some instances, were being discussed in their wages council. My hon. Friend withdrew his amendment on the understanding that we would table another with the correct technical wording to cover the point that he made. The hon. Member for Bow and Poplar (Mr. Mikardo) was very supportive of the amendment.
As the Secretary of State does not normally appoint employers' or workers' representatives himself—it would not be appropriate for him to do so in most cases—the way in which to secure the result intended is to

ensure that at least one of the associations that he nominates to appoint employers' representatives on the council is truly representative of small firms.
The amendment is without prejudice to the fact that on many councils there are already representatives of associations which claim to represent small businesses or to represent both large and small businesses—some do both. My hon. Friend's point was extremely well made and accepted by the vast majority of, if not all, members of the Committee. I undertook to table another amendment, and that is the reason for the amendment. I hope that the House will accept it.

Mr. Michael Fallon: On behalf of Conservative Members, I thank my hon. Friend for fulfilling the undertaking that he gave in Committee. My amendment commended itself across the Committee. I was grateful for the support that I received, especially from the hon. Member for Bow and Poplar (Mr. Mikardo).
My hon. Friend the Minister took away my amendment, and I notice that his amendment expresses the effect of my amendment in about 50 words, whereas I struggled to contain it within only eight. However, it would be wrong to carp at this stage of the proceedings.
This is a small but important point. The amendment means that from now on small businesses will have a watchdog on each wages council, able to speak directly to the heart of Government on the way in which wages councils and their orders operate. This applies not just to the larger companies that are covered by wages council legislation, but to the very small—the one-man or two-man family business. I am particularly pleased with this provision.

Amendment agreed to.

Clause 14

WAGES ORDERS

Mr. Trippier: I beg to move amendment No. 63, in page 14, leave out lines 10 to 12 insert—
'(1A) Any such order may—
(a) make different provision under subsection (1) in relation to periods of time beginning with different dates;
(b) provide for any matter fixed by the order in pursuance of that subsection to have effect only as from a date later than that on which the order comes into force;
but no such order shall provide for a limit fixed in pursuance of paragraph (c) of that subsection to have effect at a time when no rate or rates fixed in pursuance of paragraph (a) or (b) of that subsection will have effect under the order.'.
This is essentially a technical amendment designed to remove a possible doubt that arises in the wording of the Bill as to whether wages councils will be able to continue to provide, within the space of one wages order, for staged increases in minima or reductions in the point at which the overtime rate becomes payable. As hon. Members may know, under past legislation the councils are free to stage increases if they so wish. It is not an everyday occurrence, but there are times in negotiations when both workers' and employers' sides are glad to make use of it.
It was never our intention that the reference in the new legislation to single rates should remove that flexibility from future negotiations and make it necessary for councils to meet all over again, issue new proposals and make new orders just because they wish an uplift in one particular item to be staged rather than implemented all at


once. It seems that they may have to go through that laborious, expensive procedure if we do not make this minor adjustment to the Bill. I am sure that negotiators on both sides would be disturbed if they found, on enactment of the Bill, that we had inadvertently imposed the extra burden of additional meetings upon them.
I ask the House to accept the desirability of the amendment in the interests of retaining the present flexibility for negotiators on both sides.

Amendment agreed to.

Mr. Trippier: I beg to move amendment No. 64, in page 14, line 36, leave out from 'In' to 'as' in line 37 and insert
'this Part any reference, in relation to a time worker, to time worked by that worker shall be construed'.

Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to take Government amendments Nos. 65 to 74.

Mr. Trippier: All the amendments in this group are for the purpose of clarifying the Bill and safeguarding workers' rights. Clause 14 requires any reference to time worked by a time worker in subsections (1) and (3) to be treated as including a reference to waiting time, which is time during which a worker is required by his employer to be available at his place or work and waiting for work to be given to him to perform, but where no work is available. The need for such a provision is self-evident.
Amendment No. 64 clarifies and strengthens the "waiting time" provision by making it clear beyond doubt that any reference in part II—not just in subsections (1) and (3) of clause 14—to time worked by a time worker shall be construed as including a reference to time during which he is required, whether in accordance with his contract or otherwise, to be available for work and is so available at his place of work.
This is a small but important additional safeguard which I commend to the House as being necessary to avoid any possibility that could result in workers somehow not being entitled to payment for "waiting time".
The intention behind amendments Nos. 65 to 74 can be simply explained. The amendment to subsection 1(3) is designed to make it absolutely clear that the offence of failing to pay not less than the statutory minimum requirement is normally tied to a particular week. This effect may well be achieved because, as the subsection is currently drafted, an employer is required to pay any worker to whom an order applies not less than the statutory minimum remuneration, which is defined in clauses 14 and 15. Nevertheless, it is considered desirable for this subsection, which creates a criminal offence, to be completely clear and unambiguous. The amendment achieves this objective.
If an employer is convicted of failing to pay a worker not less than the statutory minimum remuneration, clause 16(4) and (5) enable the court to award arrears of wages which have accumulated during the two-year period prior to the date of the offence. As drafted, the effect of clauses 16(4) and (5) is that all remuneration paid to the worker for the entire two-year period would have to be added together and compared with all SMR due for that period. Any shortfall in SMR would be the amount that a court could order the employer to pay to the worker. However, this method of calculation could produce the result that no

arrears might be due even though, for some periods during the two years, the worker had been underpaid, or indeed paid no wages at all.
The Government consider that this result is not within the spirit of the legislation and does not adequately protect the interests of workers. That is why we have tabled these amendments. Their effect will be that the court, in deciding the appropriate sum to award by way of arrears, will focus only on weeks or, where appropriate, groups of weeks up to four, during which the worker was underpaid in the two-year period prior to the date of the offence, ignoring weeks when the worker may have received in excess of the minimum, and to make an order for repayment on that basis.
It is necessary to make provision for periods of up to four weeks to be grouped because some workers—most commonly those who work in restaurants, shops and supermarkets—are paid under their contracts by reference to periods of longer than a week—usually a cycle or rota not exceeding four weeks—during each of which they may work a varying number of hours, but for which they are paid a fixed sum each week. Taking the whole of that cycle into account, it might be the case that no underpayment occurred even though, in individual weeks during the cycle, the worker's pay may have been above or below the statutory minimum. In this situation it would be unfair for the week or weeks of underpayment falling within the cycle of employment to be taken separately in the calculation of arrears when, over the whole cycle, the worker had not been underpaid.
These amendments are balanced and sensible and will assist part II to operate as intended. I commend them to the House.

Ms. Clare Short: The Opposition support any amendment that makes it more likely that workers who have been illegally underpaid will get their arrears of pay. This is a small adjustment, but it is welcome and the Opposition do not resist it.
May I ask the Minister to repeat the undertaking that he gave in Committee about the redrafting of clause 17? I am grateful to him for having raised the matter with me and for saying that it is still under consideration and that he intends to hold to his undertaking. It is right, however, that it should be on the record. Will the Minister give an undertaking that his promise to look at the clause and redraft it in the way that was suggested in Committee still holds?

Mr. Trippier: I am glad that the hon. Lady was kind enough to refer to the fact that earlier today we were in touch on this matter. I gave a clear undertaking in Committee, and I do not have the slightest wish to move away from it. We detected in Committee what we believed to be a dichotomy between part I and part II, and I said that on Report we would come back with a clear amendment, which I think will have to be to part II. The parliamentary draftsman says that he requires more time That is not to suggest, by any stretch of the imagination. that we are moving away from our undertaking. I give a clear undertaking now to the hon. Lady that the clause will be ready for amendment in the other place. I am sure that we shall be able to meet the point that the hon. Lady raised with me in Committee.

Amendment agreed to.

Clause 16

EFFECT AND ENFORCEMENT OF WAGES ORDERS

Amendments made: No. 65, in page 16, line 25, after 'who', insert
', in relation to any week,'.

No. 66, in line 33, leave out
'then, subject to subsection (6)'
and insert
'the court may (subject to subsection (5A)) order the employer to pay to the worker the appropriate sum in respect of the week in relation to which the offence was committed, and (subject to subsections (5A) and (6))'.

No. 67, in line 35, leave out 'such' and insert 'other'.

No. 68, in line 36, after 'employer', insert 'such'.

No. 69, in line 37, leave out 'during' and insert
'in relation to any week falling within'.

No. 70, leave out line 44 and insert
'in respect of the week in relation to which the failure occurred'.

No. 71, in page 17, line 5, leave out
'during the period of two years'
and insert
'in respect of the week'.

No. 72, in line 7, leave out 'any' and insert 'the'.

No. 73, in line 9, leave out 'during that period' and insert
'in respect of that week'.

No. 74, in line 10, at end insert—
'(5A) A court shall not make an order in the case of any time worker under subsection (4) in respect of any such offence or failure as is mentioned in that subsection if—
(a) the offence was committed or the failure occurred in relation to a week forming part of a cycle of weeks (not exceeding four) during which the time worked by that worker in a week was different in different weeks: and
(b) the total remuneration paid to that worker in respect of the total time worked by him during the cycle was not less than the aggregate of the statutory minimum remuneration provided for him by the relevant order under section 14 in respect of the time worked in the constituent weeks of the cycle.'.—[Mr. Trippier.]

Clause 19

OFFICERS

Mr. Tom Pendry: I beg to move amendment No. 75, in page 19, line 29, at end insert
'and he shall appoint an adequate number of inspectors to ensure that the law is complied with in all workplaces covered by Wages Council orders'.

Mr. Deputy Speaker (Mr. Ernest Armstrong): With this, it will be convenient to discuss amendment No. 77, in page 21, line 19, at end, insert—
'(8) Officers acting for the purposes of this Act shall normally prosecute on the first occasion when an offence is discovered.
(9) A report shall be published annually listing the cases where prosecution was not brought and detailing the reasons for non-prosecution'

Mr. Pendry: These are very important amendments. If the Minister thought that his amendments were balanced and sensible, these are even more so.
Yesterday, a basic myth, which has been widely held, concerning the Tory party was smashed and is now dead and buried. When the Paymaster General rejected new clause 10, which would have given workers the option either to be paid in cash or by cheque, the party that proudly boasts that it is the party of freedom of choice for

the individual lost one of its basic claims. We argued that there should be freedom of choice for the worker, but the Government voted against it.
If the Government reject these amendments they will not be seen to be the party of law and order. Many of my right hon. and hon. Friends feel that the Government have already lost that claim, following their disastrous record on crime since 1979. The Government's policy on law enforcement in the industrial sphere is at stake in this debate. We debated at some length in Committee the basic principles that underlie the amendments, but the Minister was at his most unconvincing when he tried to answer the points put to him by me and some of my hon. Friends.
In a BBC Radio 4 interview on 24 April the Under-Secretary of State said that he favoured a firmer line being taken by the wages inspectorate with employers and that he intended to come down like a ton of bricks on recalcitrant employers. That could only mean more prosecutions. The Opposition intend to hold the Minister to that undertaking. However, there are many reasons why the Opposition find it difficult to believe that undertaking. One reason is that, on Second Reading, the Under-Secretary of State said that only 8 per cent. of those who are visited are found to have broken the law, and that the Government were concentrating on the worst offenders. I shall demonstrate later what his Department means when the Minister says that it is dealing with the worst offenders.
There is another good reason for our disbelief in the Minister's intentions: the well-known letter to me of 8 April in which the Minister informed me that he intended to cut the wages inspectorate by 85 personnel following the enactment of the Bill. In other words, 85 policemen—for that is what they are—will be taken away from the already inadequate number of people who are responsible for upholding the law. The charge that was levelled at the Minister then, as now, is that he has grossly overstated the simplification of the wages orders. The Bill is unlikely to reduce the inspection resources needed by the Bill. The most complex provision of current wages orders, the piecework rate, is to be retained and will be made even more important, as clause 15 prevents any other rate from being applied to pieceworkers.
Most of the work of the wages inspectorate consists of visiting employers and checking their records. Although the number of records to be checked will be less, there will still be the same number if not more employers covered by the wages councils.
The absence of records for a significant proportion of workers will present new difficulties. As a result of the exclusion of those up to the age of 21, unscrupulous employers could simply not keep the records required by clause 18(1), especially for home workers. At present, many inspections are confined to the records and the underpayment of workers for whom records are, illegally, not kept will go undetected. Inspectors will have a greater need to interview workers to discover their ages which, at present, employers are required to record. Such interviews would be extremely time-consuming. The Minister has not thought that through.
With regard to home workers, the inspectorate will be completely powerless to carry out any check if the employer denies using home workers under the age of 21. Most of the Minister's claims to justify the proposed cuts in the wages inspectorate are bogus. The exclusion of young workers will not mean less work. The workers may be fewer in number, but the number of firms will be


greater. In Committee, the Minister said that more firms would register. We argue that the 21-plus rule introduces an additional age check. From today's debate we learn that the Minister has not thought through the effect of increasing the powers of the wages inspectorate as a consequence of clause 22. That is an obvious case of the Minister not thinking through the need for additional wages inspectors.
How many staff have been allocated to the task of checking and how many will be allocated to cope with the additional responsibilities? In Committee, the Minister claimed that it should be possible to increase the number of postal checks. Such checks are ineffectual and allow the potential underpaying employer a self-check. It also gives an advance warning of a possible factory inspector visit. In how many other areas does a law enforcement officer give advance notice of a visit to check whether an offence has been committed? I hope that the Minister will give details of his plans to expand the postal questionnaire.
The Minister has an opportunity to make the wages inspectorate a truly effective policing body, but he intends to cut that body by 40 per cent. At present, an employer in the wages councils sector can expect, on average, to have a visit from an inspector once every 12 or 14 years. Even then, the employer is forewarned. It is no wonder that there are so few prosecutions. [Interruptions.] It is quite clear that the Minister is not following the argument.

Mr. Trippier: I disagree with it.

Mr. Pendry: If the Minister disagrees, he has every right to intervene.
I do not believe that the Minister can disagree with a great deal of what I have said, as sometimes his own logic would draw similar conclusions. It is no wonder that there are so few prosecutions. Even when there are prosecutions they hardly make a dent in employers' profit margins.
Recent figures from the Department of Employment show just how few prosecutions occur. In 1979, there were 12 investigations which resulted in prosecution and conviction. In 1980 there were eight, in 1981 there were eight, in 1982 there were seven and in 1983 and 1984 there were two.
At constant June 1985 prices, the average amount of fines paid out was £177 in 1979, £246 in 1980, £446 in 1981 and £107 in 1984. There were 8,227 complaints recorded in 1982 and 8,027 in 1983. There were six prosecutions in England in 1982. In 1983 there were two. In 1982 and 1983 there were none in Wales. In Scotland there was one in 1982 and none in 1983. All these figures show the kind of operation which is presently in practice. So much for the Minister's claim that he is concentrating on the worst offenders. Anyone who believes that will believe anything.
A comparison of the number of such prosecutions with the number for television licence evasion makes unlikely reading. In 1984 there were 109,143 prosecutions for television licence evasion. Also in 1984, 27,000 people were prosecuted for not having a licence fixed to their cars. Some 226,000 people were prosecuted for registration offences and some 192,308 people were prosecuted for vehicle test offences.
I could go on, but I do not wish to labour the point. The offences in industry are far worse than some of those offences, but the employers go unpunished. Few of the people prosecuted for the other offences were given a

second chance—they were prosecuted on their first offence. Prosecution in industry should be for the first offence. Some employers are punishing the low-paid workers in our community who are sometimes on the poverty line.
There should be an annual listing of prosecutions not brought and detailed reasons for non-prosecution. We could then judge effectively how the Bill is operated and have more meaningful debates on the subject.
The case for amendment No. 75 and amendment No. 77 was made out in Committee when practical illustration after practical illustration was given to the Minister, especially by my hon. Friends the Member for Birmingham, Ladywood (Ms. Short) and for Bow and Poplar (Mr. Mikardo). They described the sweatshop conditions in the east end of London and in Birmingham, and they may give some more examples tonight. The Minister appeared to be listening in Committee as he appears to be listening now, but he does not often respond in a fair and reasonable manner. In truth, I feel a weeny bit sorry for him because he is not in charge of the Bill and nor is his right hon. and learned Friend the Paymaster General. The long arm of the Treasury effectively controls the Bill. Nevertheless, the Minister's inconsistencies are considerable. In Committee, he said that he wanted an improvement in the register of firms under the purview of the wages inspectorate. He admitted that a number of employers were illegally evading registration. Surely, the logical conclusion of that must be that, if there are more firms, there must be more factory inspectors. The Minister also said he wanted more prosecutions, and the logical conclusion of that must be that there should be more inspectors.
The Minister does not follow his own logic. If he did, he would support our amendments. The Minister's failure to do so shows that he is not in command of the situation The Government are softer on law and order than anyone thought hitherto. Many unkind people say that the Government are looking after their friends by introducing this legislation. Others would say, more accurately, that the Government's intention is to scrap wages councils. The Bill is a first step in that direction. We will not have to wait too long, however, to have a Government who will reverse that trend. In the meantime, the damage done by legislation such as this must be resisted with all our power.
It is quite possible that following the example of what happened with the Shops Bill, Conservative Members in another place will have a more sensible debate than we have had, and the Bill might be legislated out of sight. If we do not divide the House, it is not because we do not feel strongly about the amendments, but because of lack of time. We await the Minister's reply and expect the other place to hear this debate. It will be able to draw its own conclusions.
All is not lost, however. The Minister might realise that what he said on Radio 4 on 24 April about coming down like a ton of bricks on bad employers can be achieved only by supporting our amendments.

8 pm

Mr. Ken Eastham: This is a subject on which we could go on at great length, expressing our disgust. If ever a clause needed attention, this is it. Before the Committee stage, the House raised the


shortage of wages inspectors with Ministers during Question Time. We deliberated the matter at great length in Committee.
The Government's desire to cut the protection of workers is now exposed. The Minister is shaking his head in disagreement. I do not believe that he could make a genuine case justifying reducing the number of wages inspectors. I look forward to his speech, knowing that the only case that the Government can make is rotten.
I should like to put the matter in perspective by illustrating what happens in Manchester. There are only six wages inspectors for the whole of the Greater Manchester area in which there are 25,000 workplaces. Each inspector is therefore responsible for more than 4,000 workplaces.

Mr. Mikardo: Perhaps my hon. Friend would like to carry the arithmetic a little further. If each of the inspectors inspected five establishments a day, which would be a pretty full day's work, he would get round to each establishment once every 18 years on average.

Mr. Eastham: I am obliged to my hon. Friend. They would be extremely fortunate to manage five visits a day as there is paper work to be done, all manner of documentation, and travelling time.
I recall the Minister trying to pacify the Committee by saying that inspectors cope in other ways. They have the magical method, he told us, of going through the Yellow Pages and telephoning factories, presumably asking each, "Are you still operating? Are you abiding by the wages council's guidelines? Could you tell us whether you are breaking the law?" One can just imagine the employers replying. "Yes. Everything is right here. We pay the right rate and conditions are right." That is absurd, but the Government are not satisfied. They have decided to reduce the number of inspectors still further. I remember my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) asking about the decline in the number of wages inspectors. The Minister admitted that there would be further reductions.
When some trade unions made inquiries among working groups in wages council establishments, they discovered that two thirds of the workers were unaware of their legal rights. I realise that that slots in nicely with what the Government want. The Minister said earlier that the Government consulted the employers, who wanted this, that and the other. He never talked about consulting the trade unions and asking them about the Bill.

Mr. Trippier: The hon. Gentleman knows very well that we consulted the trade unions. We discussed this matter at great length in Committee.

Mr. Eastham: rose—

Ms. Clare Short: But the Government did not listen to them.

Mr. Trippier: The hon. Lady says that we did not listen. The wages councils have not been completely abolished, so we did listen to a certain extent, did we not?

Mr. Eastham: That is marvellous. What a revelation. The Minister claims that the fact that we still have wages councils proves that the Government listened to the trade unions. Never mind the Bill, he argues, we have a sop in that we still have wages councils. So that is the Minister's

consultation. I bet that he want into far more detail with the employers. I bet that he went through the Bill clause by clause establishing what they wanted. The Committee stage lasted nearly three months, but very little has been given to worker groups and the trade unions.
We are faced with sheer hypocrisy. The Government are turning a blind eye to any malpractice and any breach of the law. Anything that employers can get away with goes. The Government applaud this new type of management, which is a form of legal gangsterism. The workshops that are covered by wages inspectors enjoy the worst working conditions.

Mr. Donald Thompson: Name one.

Mr. Eastham: Never mind about "Name one"; we would be here for about two years giving a list if we were given a little time.

Ms. Short: In a minute I hope to make a speech, and I shall tell the Minister of at least 25 firms in my constituency which are breaking the law—information for which he asked in Committee.

Mr. Eastha: m: If the hon. Member for Calder Valley (Mr. Thompson) took the trouble even to visit his back yard, never mind the rest of Greater Manchester, the midlands and London, he would probably find scores of such companies. I should be pleased if the media investigated the matter and inquired whether some factories fit within that category. Perhaps we could arrange for inquiries to be made, in view of the hon. Gentleman's remarks.
Workshops are usually unorganised and, unfortunately, without trade unions. Often the majority of workers are women, who are often traditionally timid. That gives rise to gross abuse, and advantage being taken of the workers.
On many occasions the Minister admitted that he recognised there were cases of underpayment. That is one of the biggest and most important issues to which wages inspectors apply themselves. The Minister admitted that an underpayment of £11·9 million over five years had been discovered. Obviously, he immediately said that the wages inspectors intervened and managed to recoup 80 per cent. of that sum. But the fewer inspectors, the greater the sums that will be stolen from workers because of reduced policing action. The truth is that neither the Minister nor the Government want to know because this is a pay-off to employers. With an election approaching. the Government promise this, that and the other, and this time the pay-off is that employers will be allowed to introduce rotten conditions.
I shall conclude by reinforcing some points which my hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) eloquently put on the record. Home workers are the most exploited worker group. Usually they are married women who cannot go out to work, perhaps because they have young children or sick parents to look after. Consequently, they are not in a position of strength, and are isolated. Their only hope is for support in legislation and from wages inspectors.
This is a blatant example of the Government encouraging sweatshops. The Minister may argue that this new Bill is better than the last Bill, but there is no reason to make it a rotten Bill because the previous one had some inadequacies. Today, we should be introducing a good Bill with clauses which benefit both sides, but this Bill is extremely one-sided. It is loaded on the side of employers.

Ms. Clare Short: Amendment No. 75 requires the Government to appoint an adequate number of inspectors to enforce the law in all workplaces covered by wages councils orders. We are amazed that the Government will resist the amendment. If they resist it, they will be telling us that they do not intend the law to be enforced in all workplaces where wages councils orders should apply?
Amendment No. 76 says that there should be a change in prosecution policy. That is extremely important because the law has been widely breached and employers know that they will not be prosecuted. We want a change in the declared policy of not prosecuting on a first offence to normally prosecuting on a first offence. We do not mean on all occasions. On some occasions it may be reasonable not to prosecute, but we do not accept that the present policy is right. It is a blank cheque to employers to break the law, and they know it.
In Committee the Minister gave us an undertaking—he has been honourable in complying with most of his undertakings—that he would review the prosecution policy. We are looking forward to that review. It is an extremely important undertaking because the need for a change in prosecution policy is urgent.
The problem is that the old law has been widely broken and the inspectorate does not ensure that it is enforced. We now have a weaker law and a weakening of the inspectorate, so we can expect that law to be widely broken and that there will be virtually no standards. The hon. Member for Langbaurgh (Mr. Holt) may get what he wants because, in practice, we will not have wages council and the law will not matter in most sectors of industry. There is a real danger of that.
In Committee, the Minister undertook to make a special examination of the new textile industry in my constituency. I am not asking for any special favours for my constituency, but I would like the law to be applied there. That seems to be a reasonable request.

Mr. Holt: The hon. Lady referred to her constituency. May I remind her that in Committee she also talked about her constituency and said:
Tuberculosis has reappeared in my area. People who do not have proper housing or clothing and are not eating properly are vulnerable to such diseases".—[Official Report, Standing Committee K, 10 April 1986; c. 508.]
That is exaggerated language. I took the trouble to find out the facts. From 1974 to 1984 the number of cases of tuberculosis in Birmingham fell from 477 to 293.

Mr. Deputy Speaker: Order. I am finding it difficult to relate these remarks to the amendment.

Ms. Short: The hon. Gentleman's information may be right, but I recently visited a youth training scheme workshop from which two young men had left with TB. That was the case to which I was referring, and I can give chapter and verse to the hon. Gentleman, if that is what he wants. TB has reappeared among young males whom one would not normally expect to have TB. Both the people who run the workshop and I find that shocking, and it is worthy of comment.
The Minister undertook to look into the problems in my constituency, and asked me to provide him with whatever information I could find about them. The experience of my hon. Friend the Member for Bow and Poplar (Mr. Mikardo) of the textile industry in his constituency is

noteworthy. My constituency is not a traditional textile area. The new textile industry in the west midlands developed in the late 1970s and accompanied the great rise in unemployment. I have gone to some trouble to answer the Minister's request.
A project called Aekta is based in my constituency and seeks to work, particularly with Asian workers, in the largely Asian new textile industry so that their legal rights are enforced. It produced a report, which was published yesterday, on how the law is widely breached—I hope that the Minister is listening.

Mr. Trippier: I am listening.

Ms. Short: —the Minister is not listening—and how the inspectorate does not assist individuals who approach it for help. The report gives chapter and verse. It is shocking, and I should like to give a copy to the Minister, together with a list of employers, compiled by the project, who are known to have broken the law. I ask the Minister to look at them, and not merely to put the matter right in Ladywood, but to draw lessons about what is going on elsewhere.
The law is being widely flouted. If the Minister proceeds with his present proposals to cut the wages inspectorate and to continue with a no prosecutions policy on a first offence, the law will continue to be flouted. The Government are almost encouraging employers to turn a blind eye to the law. It is outrageous.
In my area, there is an association of the owners of those firms. They advise each other on how to get round the law, and the inspectorate is probably convinced that they do not know the law. It is no excuse for someone to say that he does not know the criminal law. It is time that we prosecuted employers who break the law; then they would all start complying with it. I ask the Minister seriously to comply with the undertaking which he gave in Committee to review prosecution policy. If he reviews it, he will have to concede our other amendment, whether tonight or later, and appoint more wages inspectors because the law cannot be enforced by the present inadequate number or the number after the threatened cut in inspectors.

Mr. Trippier: I am happy to confirm that I am anxious to review the prosecution policy. I am also anxious to study in detail the information which the hon. Member for Birmingham, Ladywood (Ms. Short) has brought to my attention. In Committee, the hon. Lady sought to draw the attention of all hon. Members to the problem in her constituency. As the Minister responsible for this area, I must consider carefully the position there. No Minister of any Government would condone the breaking of the law.
The hon. Member for Stalybridge and Hyde (Mr. Pendry) made an uncharacteristic, unfriendly and unkind speech. I have come to know and respect the hon. Gentleman over many years, but he broke with tradition today. I could not believe what heard. Although the hon. Gentleman was right in quoting accurately from the first part of the letter that I sent to him—I stand by the figures I gave—he did not mention the second page of the letter, which I shall strengthen and develop in my reply to the debate. Indeed, it will form the substantive part of my reply to him and to the hon. Member for Manchester, Blackley (Mr. Eastham)—

Mr. Eastham: It was a very weak second page.

Mr. Trippier: No. I spent a long time putting it together. It was not a case of speaking off the top of my head. It was well prepared, well thought out and researched.
I wish to go a little further than the hon. Member for Blackley was prepared to go in his speech. He quoted what I said on the "Today" programme on Radio 4. It is true that I said that I wanted to take a firmer line, but I also said that we should not come down like a ton of bricks. I also said that it was important to recognise that, as a result of our simplifying the wages council orders, there would be less likelihood of an employer praying in aid the fact that he could not understand the wages council order and that that was why he was underpaying his worker by mistake. All members of the Standing Committee agreed on that point.
Let me try to develop the argument that I put in the letter to the hon. Member for Stalybridge and Hyde, which still bears close examination. First, I said that, as a result of the legislation,
wages orders will not have any of the present complexities and it will be simpler and quicker to check compliance: there will be much less likelihood of underpayment due to employers being unable to understand the intentions of councils; workers will be clear about their legal entitlement; the number of workers whose pay has to be checked will be about 20 per cent. less because those under 21 years of age are to be excluded; and it should be possible to increase the proportion of initial checks carried out by postal questionnaire.

Mr. Eastham: The Minister's remarks show that it does not matter about those below the age of 21. It reduces the numbers.

Mr. Trippier: That is not the point and the hon. Gentleman knows it. We are talking about two different things. We are talking about taking those aged under 21 out of the purview of the wages councils. What joins the Opposition and the Government is that we are determined to ensure that the law is observed. By any standards, the figures given by the Opposition on Second Reading and in Committee are wildly exaggerated. During the past three years, 5 per cent. of the workers whose pay was checked by inspectors were found to be underpaid. We are worried about the percentage of workers; at least, that is what I thought we were discussing in Committee.

Mr. Eastham: rose—

Mr. Trippier: May I finish this exposition of my letter to the hon. Member for Stalybridge and Hyde? The sixth point was that a significant reduction in the inquiries received by wages inspectorate officers is expected. On compliance with wages council legislation, I said that figures were not available yet for Greater Manchester. How the hon. Member for Blackley can say that he has the figure when we have not made a decision on it stretches credulity to breaking point.

Mr. Eastham: It is no great state secret. I got the information from the Low Pay Unit.

Mr. Trippier: I could have put money on its being the Low Pay Unit.

Ms. Clare Short: It is usually right.

Mr. Trippier: We have had some disputes about what the Low Pay Unit says, and we discussed it at some length in Committee. I assure the hon. Member for Stalybridge and Hyde and his hon. Friends, including the hon. Member for Bow and Poplar (Mr. Mikardo), who is

worried about it, that I am anxious, where possible, to ensure that there is compliance. It cannot be in the interests of any Government to be seen to encourage people to break the law. It cannot be good for the industries in the wages council sector.
The worst signal that could go to employers is going out from this debate. The Opposition are signalling the fact that employers can get away with it. That is the exact point that I was anxious to make on the "Today" programme. I make it clear again on the Floor of the House that the people who assume that they will get away with it can forget it.

Mr. Mikardo: Does the Minister believe that the employers in the sweatshop industries did not know before today's debate that they could get away with breaking the law? I listened to him with care, but I must tell him that I gave up believing in fairy tales at the age of seven.
I shall detain the House for only a minute to make a simple point. I often understand a Minister's rejection of an amendment even when I do not agree with it, but I am bound to say that the Minister's rejection of amendment No. 75 is incomprehensible. It beggars belief. Here is the Minister with his big talk about our all wanting the law to be enforced, but he refuses to accept the obligation to appoint an adequate number of inspectors to ensure that the law is complied with. The Minister is saying, "I want the law to be complied with, but I will not take the one measure without which we cannot ensure that the law will be complied with."

Mr. Trippier: Will the hon. Gentleman give way?

Mr. Mikardo: I shall give way later, because I wish to ask the Minister a question.
I am trying to persuade one of my noble Friends in the other place to table an amendment, because I want to suss out the sincerity of the Department of Employment. I want him to table an amendment saying:
The Minister shall appoint a number of inspectors inadequate to ensure that the law is complied with".
This would create a situation in which the employer can break the law with impunity. Will the Government spokesman accept that with avidity, because that is the only logical consequence? I remind the Minister that he is speaking for the party that claims to be the party of law and order. This representative of the party of law and order is now saying, "I am going to give encouragement to employers to break the law with impunity, as I refuse to set up the machinery that prevents them from doing it."

Mr. Trippier: But I am not going to say that.
Amendment 75, as worded, if strictly interpreted would present the Government, any Government, with an impractical task, a mandatory requirement to provide
an adequate number of inspectors to ensure that the law is complied with in all workplaces".
That is truly unrealistic, and the hon. Gentleman knows it.

Amendment negatived.

Mr. Trippier: I beg to move amendment No. 76, in page 19, line 32, at end insert
', and if it appears to any such officer that any person with whom he has dealings while so acting does not know that he is an officer acting for the purposes of this Part he shall identify himself as such to that person. '.
There was a full debate in Committee on whether wages inspectors should as a matter of course automatically


produce their authenticated documents on every occasion on which they had dealings with any person in connection with enforcing part II of the Bill. My hon. Friend the Member for Darlington (Mr. Fallon) argued forcefully that this was essential on the grounds of courtesy and common sense and because officials generally had too many powers of entry. The Government took the view that the act of producing the warrant, as the inspector's document is called, tends to create a barrier of officialdom between employer and inspector and can prevent the inspection from being carried out in a helpful and constructive manner.
I indicated to the Committee that in practice the inspector initially identifies himself by means of a printed visiting card that shows his name, office address and telephone number which the employer or worker can retain for future reference. This arrangement, readily acceptable to the employer, has worked well for many years. He always produces his warrant when asked to do so.
The hon. Member for Bow and Poplar (Mr. Mikardo), like my hon. Friend the Member for Darlington, put a fairly compelling case. Although the amendment was lost in Committee, none the less I thought it fair, in view of what was said by my hon. Friend the Member for Darlington and by the hon. Member for Bow and Poplar, to return with this amendment, which I think meets in part, if not totally, the points raised in Committee.

Mr. Fallon: I thank my hon. Friend for going even further than his original undertaking. As I recall, he undertook to look at the matter again if I withdrew the amendment.
The dispute in Committee arose from the distinction between the officer identifying himself—none of us wants bogus people on the premises or people falsely claiming to be officers of various departments—and establishing the rights given to him under the schedule and his ability to exercise them on the premises. I think that this is a rather confused area, although in the main my hon. Friend has gone further than he did originally when several times he attempted to dissuade us from dividing the Committee.
I hope that the amendment will be satisfactory to the inspectors. I know that my hon. Friend was concerned that their task should be made no more difficult. I am sure that it will be satisfactory to those business men for whom the first visit from the inspectors can be a traumatic experience.
I am delighted to welcome the amendment.

Amendment agreed to.

New Clause 6

REDUNDANCY PAYMENTS

'The provisions of Part III of the Act shall not take effect until the national insurance payments made by employers and employees into the redundancy fund are reduced to a level sufficient to cover no more than the likely costs to the fund of redundancy payments.—[Mr Prescott.]

Brought up, and read the First time.

Mr. Prescott: I beg to move, That the clause be read a Second time.

Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to take amendment No. 80, in clause 32, page 29, line 39, leave out 'August' and insert `November'.

Mr. Prescott: There are two principles embodied in these proposals. New clause 6 is concerned with the principles of the contribution and distributiom of the redundancy fund. Amendment No. 80 is concerned largely with the date. Dealing with the times from which the proposals in the Bill would apply to remove the rebate of 35 per cent. to companies employing over 10 people in redundancy situations, the date is 1 August. Although the date in the Bill, as I recall, is 31 July, it is effectively applicable from 1 August.
The debate in Committee showed that we recognise that the redundancy fund established in 1965 has covered different forms of rebates. It started with something like 75 per cent. This was changed by the previous Labour Government to 50 per cent. A year or so ago it went to about 35 per cent., the level at which it remains.
The operations of the fund are such that it is a contributory fund in terms of the employee and the employer. Its profits in its last year of operation were about £9 million, according to the last annual report, with approximately £751 million in receipts. While that is not a large amount, the fund is in surplus and has attracted the attention of the Chancellor. The first mention of it came in the Budget speech when he proposed to remove the 35 per cent. rebate in the case of companies with more than 10 employees. The Chancellor estimates that there will he a saving of about £200 million. The justification, according to the Government, is that this would be used to fund some of the employment scheme measures, particularly those which are long term. It is a pity that the moneys that we are always finding from one source or another are all for employment schemes and never to do with real training or jobs, but that is the nature of this Government's approach.
It is perhaps appropriate that we should be debating this on the day on which the unemployment figure is at a record level of well over 3·2 million. Considering that and the scale of redundancies, the levels of unemployment in the country are on a scale comparable to the 1930s. Unemployment now lasts longer and has been increasing every year for six years. In the 1930s, the increase each year continued for four years. That is the scale of change in the economy that has taken place in recent years. That has had an effect on redundancies and subsequently the great claims that are being made. After the recent announcement, there are to be further redundancies in a number of companies.
Our position was made clear in Committee. We did riot wish to amend the relevant clause or the one concerning dates and times. We thought that the redundancy fund was paying out fairly. The 35 per cent. kept it in balance with a surplus of £9 million.
If the Government were so concerned about the money, perhaps the surpluses could be paid off, as our amendment suggests, to the employers and the employees by making a reduction in their contributions. Instead, the Government have chosen to save money and use it in another way. The case is not unique. There is a strong feeling that, with contributory funds, the Government are denying the rights for which the people paying and then denying them benefits promised from the fund. Employees and employers were promised that they would receive in redundancy cases a 35 per cent. rebate. That was changed, which is a denial of benefit to people who have paid into the redundancy fund.
My memory goes back to the graduated pension fund, another great swindle perpetrated on the British electorate. Despite the fact that people had paid contributions, the Government finished the fund, the money was transferred and the benefits were either denied or were so small as not to be worth a great deal. The earnings-related benefit is a more modern example. If a private company had changed the fund in the same way, it would have been taken to court. The Government, with their power, can raid public funds, and today another public fund is raided to finance some of the Government's other policies—in this case, employment schemes. We have not sought to amend the Bill in this way, but we are making it clear that, to be fair, the surplus should go to those employers and employees who have contributed.
We hear a great deal from the Government about the costs of industry, and here we are talking about, as the CBI pointed out, an extra £200 million of costs on industry for financing redundancies. Unemployment is continually increasing, and no member of the Government is able to say when it will stop doing so, let alone go down. We can assume that redundancies will continue apace. If we wanted any reminder of that, we have only to listen to the radio or watch the television today. About 4,000 people are to lose their jobs in the shipyards; British Caledonian will be making 1,000 redundant; and today the first suggestion came of more redundancies, at British Rail Engineering Ltd, which will mean that a few more thousand are unemployed, leaving BR ready for the privatisation proposed by the Government, or the transfer of the parcels business. Perhaps many of these companies will be encouraged to rush through their redundancy programmes because substantial amounts of money are still available under the 35 per cent. rebate on redundancy.
In Committee, my hon. Friend the Member for Jarrow (Mr. Dixon) asked whether the 90-day principle applied. Clearly, if it were applicable until August, 90 days before that would be 1 May. If a company—say, British Caledonian or British Shipbuilders—puts in an application now, will the company be able to get the money for redundancies? If it will, that will encourage companies to throw people out of work much more quickly than they might otherwise do. In that sense, the Government may be using their £200 million for employment schemes, but they have created a financial incentive for people to be thrown out of work at a faster rate. We may not have seen the end of that, because this can run up to 1 August.
Perhaps it is the Paymaster General's view that, by bringing the scheme forward to August, the Government will avoid a mass of redundancies because people will wait even longer than a year. The Minister needs to give us a clear answer showing how that applies. An answer was not given in Committee, and Ministers may not have known it. However, the Minister should tell us the position of a company that makes application for payment under the fund. Is the payment allowable on the day that the redundancy takes place or from when the company gives notice and makes the application for the redundancy fund?
That brings us directly to our amendment, which is about setting a time. In Committee on 29 April, the date of 31 July was written into the Bill, but that is creating a number of problems. The first is that to which I have just referred—companies rushing through redundancy

schemes. A second difficulty arises out of other legislation. In Committee on the Transport Act, we warned that the Act would bring about many redundancies and reductions in services, and that deregulation would be disastrous. The Government have never accepted that argument, but it seems that the by-elections and local elections have painfully printed it on their minds.

Mr. Nellist: My hon. Friend may be interested in the figures from the west midlands. We already know that 500 of the 1,800 buses in the west midlands will stay in the garages from 26 October. If this part of the Bill goes through unamended, with the loss of the 35 per cent. rebate to the transport authorities, which have already had their grants cut by the Secretary of State for Transport, the redundancies, with which I disagree, will be even higher because the authorities will have to find the 35 per cent. as well as the cuts in the transport supplementary grant.

Mr. Prescott: I was coming to that point.
The passenger transport executives, or the district authorities such as Hull, will have many difficulties. Several of my hon. Friends may mention the case of south Yorkshire, where all the PTEs expect redundancies as a result of the reorganisation now that the subsidies and funding for transport have been reduced. South Yorkshire will lose about 1,800 jobs. All the PTEs together will lose about 9,000.
This is a problem not just for the PTEs but for the municipal bus corporations. In previous legislation, it was agreed that there will be a transfer to another body—for example, in Hull, to a private company. The local authorities cannot give financial support to those companies from 25 October. That would mean that the transfer has to be done by August. Therefore, most PTEs and municipal authorities, with the reorganisation required of them by previous legislation, took into account the redundancies that will take place and the cost of financing them. However, they are now being denied the 35 per cent. rebate, which they assumed would apply to October or November—hence the relevance of our November amendment. The PTEs no longer have the resources to fund the level of redundancies except by cutting services or by making even more redundancies, and problems could be even more accelerated, bringing about yet more redundancies.

Mr. Don Dixon: There is no supplementary rate either.

Mr. Prescott: My hon. Friend reminds me about my next point—the similar legislation on financing that prevents councils from making a supplementary rate. Other legislation has not been co-ordinated with this date. The Chancellor saw a chance to get a few bob on the side to finance his employment scheme, and to take a penny off the rate of income tax. It would have been better to keep the tax at the same rate and fund the employment schemes, but he wants to give money to those who can well afford to live without tax cuts. He has robbed redundancy funds to find that money.
If the councils are not to raise a supplementary rate, how are they to get over their difficulties? If the Government would accept an amendment to extend the scheme to November, the PTEs could proceed to do what has already been determined under the financing of their


reorganisation as required under other legislation. On 29 April, the Minister made it clear, when challenged by a number of my hon. Friends:
I have no doubt that we shall divide on it. If it assists the hon. Gentleman, I shall write to him and the hon. Member for Ladywood, with a copy to each member of the Committee, take on board the points made and explore still further whatever I undertook to consider this morning. I can say no more than that."—[Official Report, Standing Committee K, 29 April 1986; c. 879.]
I note that he wrote to my hon. Friend the Member for Birmingham, Ladywood (Ms. Short) and probably to one or two other members of the Committee. He made it clear in the letter that discussions were still being undertaken with the Department of Transport and the Department of the Environment. He did not think that he would be able to amend the Bill on Report. There is a possibility therefore that he will have it amended in another place.
We should like to know what the Paymaster General thinks about this matter. Is he making desperate phone calls and conducting discussions? Perhaps he could enlighten the House as to what is happening on this important matter. What does he intend to do in another place to amend this point?
There is a great deal of anxiety among transport authorities at the moment. They have carried out their statutory obligations under other legislation but now find themselves forced against the wall. The Government, in all justice, could keep their principles by accepting the amendment. They could say that the change will not be applicable until 1 November.

Mr. Richard Caborn: The Government have hit the jackpot again with part III. The trade unions and the employers, through the Confederation of British Industry, have said that they do not want the redundancy payments to be tampered with or effectively removed in relation to Government contributions. That point was revealed in an article in the Financial Times on 17 March, which we discussed fully in Committee. It showed that the Government are out of tune with what is happening in industry.
My hon. Friend the Member for Kingston upon Hull, East (Mr. Prescott) made a number of pertinent points, and I should like to cover several other matters which cover future employment patterns and so discuss what the Government are putting on the employers' plate.
The Government's action over the qualification period for redundancy pay could mean, as my hon. Friend the Member for. Kingston upon Hull, East said, that redundancies will be declared in the near future. The Government's actions could accelerate the number of redundancies either before 1 August, or beyond that date, depending on the Paymaster General's reply about the 90-day period. The Government's action could spark off a considerable number of redundancies in companies which are considering rationalisation, and we have seen many examples of such redundancies this week.
When the Bill reaches the statute book, it could destabilise the labour market. An employer will ensure that he does not have long-term employees, and therefore will not have to bear the full burden of redundancy costs. In future, an employer might not necessarily declare a policy, but will work to a policy which will ensure that people are not on payrolls for more than two or three years. This will ensure that the employer has to pay only a

minimum amount of redundancy pay at any one time. I could quote many examples of industries where that kind of attitude might be prevalent.
Redundancy payments have been funded on a commonsense approach. Through national insurance contributions, all industries contribute to the redundancy payments fund. The sole burden for redundancy payments is not placed on the industries which are having problems with finance or restructuring. The burden has been borne, to some extent, by profitable industries, and the employees in the successful industries have been paying into the central fund, which has been used to make redundancy payments. Responsibility has been shared across industry and commerce throughout the United Kingdom.
When part III reaches the statute book, it will compound the problems of the industries which are having difficulties with finance or restructuring. Liquidations and closures might be brought forward because, if there are more than 10 workers in a company, that company will have to bear 35 per cent. of the redundancy payments. Increasing the redundancy payment burden to 35 per cent. might tip the balance for a small company, employing 12 or 14 people, which was previously on an even keel. It could cause that small company to go into liquidation or bring in the receiver. The collective funding of redundancy will be altered and a company will have to bear the full cost of any redundancy pay. Rather than helping small businesses or industries which are in financial difficulties or which are restructuring, the Government are compounding their problems.
I should like to consider amendment No. 80, which is important for my constituency in south Yorkshire. If the amendment is not accepted, or if there is no response from the Government to our proposition, there could be serious problems for constituencies such as mine.
My hon. Friend the Member for Kingston upon Hull, East, was fortunate to receive a letter from the Minister. In Committee I asked:
Will the Minister do the same with the Department of Transport, with regard to transport supplementary grant? Probably as profound a case can be made on this as has been made by my hon. Friend on the local authorities.
The Minister replied:
Absolutely, I am delighted to respond to the hon. Gentleman on that point."[Official Report, Standing Committee K. 29 April 1986, c. 870.]
I have not received a letter on that issue, and I have nor seen the correspondence to which my hon. Friend the Member for Kingston upon Hull, East, referred.
South Yorkshire passenger transport executive is probably the executive that has been hit hardest. It has had to bear about £30 million worth of cuts in transport supplementary grant. This has caused fare increases of 250 to 300 per cent. It has also meant a reduction in services, and a reduction of 35 per cent. in the number of passengers carried.
The effect of the Transport Act 1985 on south Yorkshire has been to rip the heart out of the community. Now, in this part of the Bill, we see the vultures of the Department of Employment homing in to pinch another £1·5 million to £2 million. This means that we could see further redundancies, in addition to the 1,600 redundancies which south Yorkshire will experience as a result of the Transport Act.
South Yorkshire made representations to the Secretary of State for Transport on the transport supplementary grant. In Committee the Minister refused even to look at


the redundancy payments issue, but at least the calculation of the transport supplementary grant did include something for redundancies. From that date to this, as a result of part III, the full cost will have to be borne. It is estimated that in south Yorkshire this will be about £1·5 million.
Will south Yorkshire reduce services further and have more redundancies? It will not be able to go out to tender or subsidise those routes. Will it put the fares up? It can do that, and if it does there is every chance that passenger numbers will decline again, leading to further redundancies.
9 pm
It is now incumbent upon the Paymaster General to answer the questions that we put in Committee. Those questions must be answered within the next few weeks, because the tenders for those routes have gone out and decisions have to be made. It might mean that the executive will bring forward the redundancies to some time in July, to protect the services and stop further fare increases.
Unless the Paymaster General or a Minister from the Department of Transport gives us a decision, things will be extremely difficult for PTEs throughout the country. It is estimated that as a result of the movement of three months they will lose about £9 million which will effectively be taken away from the subsidies for the routes, many of which will be rural routes, which I have no doubt many Conservative Members would wish to maintain.
I hope that the Paymaster General will accept the modest amendments. If he is not prepared to do so, it is incumbent upon him to tell us how the PTEs and the other local authorities will operate.

Mr. Peter Hardy: Amendment No. 80 contains an entirely reasonable and responsible proposition, and it is that proposition to which my brief remarks will be addressed. This matter should not be considered now; it should already have been resolved. The Government clearly bear a serious responsibility and it should have been accepted before now.
My hon. Friends the Members for Kingston upon Hull, East (Mr. Prescott) and for Sheffield, Central (Mr. Caborn) have put the basic arguments. The fact remains that the PTEs have been placed in a dreadful position over their redundancies. They have been put in that position as a result of the timing in the Bill. I imagine that if any Minister were here from the Department of Transport he would have to accept—he could not deny—that the arrangements made by the PTEs have been dreadfully imperilled, and they were made at the behest of this Administration.
As the Bill stands, the proposals mean that PTEs in south Yorkshire and elsewhere face substantial burdens which in this financial year may be intolerable. They made those arrangements in response to Government policy, and the Secretary of State for Transport was well aware of them and could be said to have been a party to those arrangements.
As has been pointed out, the PTEs cannot raise interim revenue directly. Rate capping and other local authority expenditure controls make that clear. Nor can they guarantee to raise the income which will otherwise be required if the Government do not accept the amendment, because if they increase fares, the certainty in south

Yorkshire is that ridership will decline, and income might be diminished rather than enhanced. The PTEs cannot easily make additional redundancies. The burden accepted is already well nigh intolerable. In any case, if they make additional redundancies they could aggravate the situation about which we are complaining now.
As a result of the Bill, passenger transport executives are being squeezed between the upper millstone of Government negligence and the lower millstone of Government incompetence. The Secretary of State for Transport is not present, but someone from that Department should be here. The passenger transport executive acted in good faith. It was not enthusiastic about the arrangements. We in south Yorkshire do not like the arrangements, and I do not think that any of the other PTEs in metropolitan areas like them either. The PTE made a democratic response to statute, and now the Government have changed the ground rules. That is intolerable.
I should have thought that at least a junior Minister from the Department of Transport would have the grace to come to the House to make it clear that that problem, which the Department created, and which the Department of Employment is now compounding, exists. In the absence of such a Minister, the Paymaster General must make a responsible response to the House; otherwise the Government will once again be shown up in a very poor light. By their response to amendment No. 80, the Government will demonstrate whether they are prepared to act with integrity, like a sensible Administration.
Before we conclude this debate, I hope that the Government will recognise that the PTEs have a powerful case. The Government should respond to it and relieve the anxieties that exist in my PTE area in south Yorkshire and in all the other PTE areas. I trust that the Paymaster General will reassure us that there will not be any insistence on the irresponsibility and incompetence to which I have referred.

Mr. Allen McKay: I wish to reinforce the arguments made about the clause and the amendment. I am sure that the Paymaster General did not envisage the problems that would he created by altering the redundancy scheme, particularly in relation to the south Yorkshire PTE. When legislation makes a change, there is always a dividing line, and there are always problems with it. There are always losers and winners on either side of the dividing line. The problem is where to draw it.
I believe that the Government are slowly moving towards not making any contributions at all. People will be dismissed, and will get just a vote of thanks before moving down the road. We are discussing how the legislation will affect, in particular, the south Yorkshire PTE. We pointed out the problems that deregulation would cause and we will be proved right. South Yorkshire has had to cut about 30 per cent. of its traffic. By and large that affects the rural areas, weekend services, and school and hospital services. I have a list of the services being tendered for. There are fairly isolated areas round Penistone, but there are no Sunday or Saturday services. The first bus into Penistone is at 8 am and the last bus out is at 7 pm. We do not yet know how people will get to work. That is why we are trying to overcome some of these problems.
No one knows what the cost to the local education authority will be. After all, all the school services have


been stopped. I accept that the process has not yet come to an end. But this is where the legislation is relevant. The £9 million that it will cost the south Yorkshire PTE is the £9 million that it hopes to use for subsidies. Thus, one Department is not thinking about the effect of its legislation on another. The amendment does not make a very big change, but it is a sensible change. There is nothing to stop the Paymaster General accepting it. He could give us an assurance that he will consider it, or arrange for the Bill to be altered in the other place. However, he should not dismiss our arguments out of hand by rejecting the amendment.
About 30 per cent. of our bus services have disappeared. I hope that we can find the money to reinstate them. If the Bill is not amended, the PTE will have to make 1,600 people redundant immediately. That is the only way that it can save £9 million to £10 million. However, we are approaching the holiday period and. if it makes 1,600 people redundant, how will it cope with holiday absences? It would mean even less services.
Of course, the PTE could try to recoup the finance from another area. However, fares have already risen by 250 to 300 per cent. and there has also been a severe cut in services. If the PTE has to raise fares again, that will mean even fewer services and more redundancies. Where will the PTE find the money? Local authorities cannot increase rates or they will face rate capping. It is a catch-22. Without any shadow of doubt, the problems are very serious.
I am sure that the Paymaster General did not consider the problems that would be caused. Government policy has caused problems by deregulation of transport, and Government policy will cause further problems with transport, which the local authorities will have to overcome. Rather than compound the problems, the Government should accept an amendment that would help to alleviate them.
All local authorities budget for a 12-month period. Indeed, the Government have stopped local authorities from making any interim rate increases. That is another outlet that the Government have blocked, and there are no longer any gaps or outlets for the PTE. I ask the Government seriously to consider the problems that this legislation will cause. It is bad legislation. Local authorities have budgeted on the Government's original intentions, and that should not be altered now.

Mr. Nellist: My hon. Friend said that one avenue of escape for the south Yorkshire PTE was to bring forward the 1,600 redundancies. The social security costs for 1,600 sacked workers must be about £100,000 or £200,000 a week, so for every week that the redundancies are brought forward the DHSS will have to find a couple of hundred thousand pounds. That is another financial idiocy in this part of the Bill.

Mr. McKay: My hon. Friend is right—the Bill shuffles the problems from one Department to another. It is hardly the way to treat workers who have worked for a firm for 30 or 40 years. All the planning has been carried out in accordance with Government wishes.

Mr. Caborn: The PTE faces another problem. Within the normal functioning of a commercial department, the profit from one area can be transferred to a less profitable area; it is called cross-subsidisation. However, that option

has been removed by the Transport Act. The PTE cannot transfer profits from a route in a city or town to a less profitable route. Every avenue has been closed.

Mr. McKay: Every loophole has been closed and there is no room left to manouevre. It is ridiculous to introduce such proposals halfway through a financial year. If a local authority had done that, there would be slapped wrists and bottoms. If the Paymaster General thinks about the problems a little more deeply, he will come to realise that he should never have brought forward the proposal.
We are asking the Minister to have another think. The Government will not gain anything by implementing this provision because any benefit to them will be lost in DHSS payments. The people need to be treated in a better way than that which the Government propose.

Mr. Dixon: This issue arose in Committee on 29 April. Any employer who pays out more than 100 employees must give 90 days' notice of his intention to do so. The idea of that notice—the Paymaster General should know this because he is the Minister in charge of labour relations—is to enable trade union representatives to negotiate with employers to ascertain whether some of the redundancies can be avoided or whether the impact of redundancies can be alleviated. For example, it is sometimes possible to arrange transfers. Any employer who wanted to qualify for the 35 per cent. discount would have had to give the unions notice two days after the Government's amendment was moved. The amendment was moved on 29 April and the 90-day requirement for negotiations with trade unions would have compelled employers to issue notices only two days afterwards.
We did not receive a satisfactory explanation from the Minister in Committee. He told us that a decision had been taken above his head and explained that it would save £55 million in public expenditure. In fact, he meant that £55 million would be stolen from le contributions made by employees and employers to the central fund.
The purpose behind the Government's amendment was to steal money from others, and they are damaging industrial relations. It will be impossible for anyone to qualify for the redundancy rebate and for the unions to be given 90 days notice to negotiate with the employer to try to avoid redundancies by, for example, arranging transfers.

Mr. Flannery: Those of us who were not members of the Committee are beginning only now to grasp the trickery that has gone on. The issue before us arose only on the Committee's final sitting. It is almost unbelievable that the Government should have introduced such a provocative measure at this stage. Anyone who canvassed prior to the local elections will realise that the Government are in a mess. They could not have planned their own demise more brilliantly.
We in south Yorkshire feel especially deeply about the Government's proposals. In part, that is because we have only just learnt about them. The ordinary people in the area are unaware of what has gone on. The Minister may laugh, but the facts have not been brought home to ordinary people.
In south Yorkshire, we have kept fares down to the best of our ability. There was a larger vote at every election for the Labour party because of its policy of holding down the


level of fares. It was a process of real democracy. Rate capping pushed us into an extremely difficult position and the result was that fares had suddenly to be tripled. Indeed, they will have to be increased again.
On Saturday morning, I travelled into Sheffield from outside the town. I had to pay nearly four times as much for my ticket as I had been used to paying. I travelled on a one-man bus. Nowadays, most buses do not have clippies. The bus on which I travelled pulled up at every stop. Because it was a one-man bus, the driver was completely occupied collecting fares, to the danger of the public. On double decker buses, vandalism and activities of that nature could take place upstairs. That poses great difficulty. I cannot believe that the Government could plan to do what they have done at the last minute. If it were explained to an ordinary person, he would not believe that it could happen.

Mr. Kenneth Clarke: The hon. Member for Barnsley, West and Penistone (Mr. McKay) implied at one point, in an otherwise careful, considered and clear speech, that we might be moving to a position whereby an employee who faces the unfortunate possibility of redundancy might lose his statutory entitlement. That is certainly not contemplated by the Government or the Bill. When we consider the amendments, we must bear in mind which part of the Bill they relate to. The Bill does not affect in the slightest the statutory entitlement to redundancy compensation of an employee who faces redundancy. The Bill aims to get rid of a method of financing companies that make redundancies—a method which in our opinion, is obsolete.
I shall not repeat the arguments I used on Second Reading to explain why economic circumstances have changed since the measure was introduced. The rebates actually make it cheaper and easier for an employer to contemplate redundancy. An employer receives a subsidy—it was reduced by the Labour Government and ourselves to 35 per cent.—which is taken out of a fund to which employers and employees contribute. It is a churning of money to make it easier to make people redundant. In the present conditions of unemployment, we did not think that that should continue.
Because the payments out of the fund, by the conventions used by former Governments and our own, technically count as public expenditure, we were able to make public expenditure savings which we have diverted to the other employment measures which we announced last autumn and in this year's Budget.
Neither the Opposition's proposed new clause nor their amendment challenges the fundamental policy decision to end the rebates. Both bear on the timing of the change. Assuming that the House carries the Bill, that it goes to another place and becomes law, I expect that, if the labour party ever came to power, it would not bring back the redundancy rebate system, in view of present labour circumstances.
The new clause and the amendment essentially urge delay. One says that we should delay until the contributions to the fund have been brought down so that the fund pays for redundancy payments only, and the other says that we should delay from August to November. That is the only issue before us regarding the new clause and the amendment.
I can understand, in some ways, the need for delay, but I do not think that it goes with the arguments that have been made to us about the fear that employers will somehow speed up redundancies in order to get the rebate. In my opinion, that is not a relevant consideration. Normally, employers declare redundancies only when they are forced to do so. They do so extremely reluctantly. Nobody times redundancies to get a rebate. I think that under the arrangement, an employer receives, on average, £600 each rebate. If an employer is contemplating redundancies and is tempted to speed them up then, of course, the more time that is given before the change comes into effect the more likely it is that people will act to speed up the redundancies.
The hon. Member for Jarrow (Mr. Dixon) intervened briefly and said how bad it was that we had tabled an amendment in such a way that employers planning large redundancies, who had to give 90 days notice to the trade unions, had only two days in which to do so. If he really feels that there is a danger of employers rushing forward, which I do not agree with, all I can say is that if we give them more time there is more chance of them bringing forward redundancies.
We had to introduce an operative date. Whatever date we chose, there would have been hardship for some employers from a cash flow point of view. The more time we give, as advance warning, that we plan to end the rebates, the more likely it is that an employer who feels doomed to make redundancies, and for some reason is tempted to bring them forward to get the rebate, will actually do so. I do not follow that point.
I shall deal with the practical reasons why the new clause and the amendment are somewhat misconceived. It is important to realise that the fund is not just for redundancy payments. It will not be wound up completely. Last year, as well as paying out nearly £250 million in rebates to employers and £55 million direct to employees when their employer defaulted on the redundancy payments they were due, the fund paid out some £50 million to employees who were owed arrears of wages, accrued holiday pay, pay in lieu of notice and certain other debts when their employer had gone into liquidation, receivership or bankruptcy owing money to the employees. When the Bill is enacted, the fund will still be paying out statutory redundancy payments to those redundant workers whose firms could not afford to pay what they owed and will be paying out those other sums owed to employees when a firm unfortunately goes into receivership. The basis upon which the new clause is intended to operate is misconceived.
The new clause refers also to contribution levels by employers and employees to the inevitably reduced fund. I accept that that is a relevant point, but I point out that every autumn we review the contribution levels for national insurance generally. Any changes are included in the Social Security Contributions (Rerating) Order which both Houses debate in November or December each year. At present, the contributions to the redundancy fund represent 0·25 percentage points of the standard 9 per cent. employee's national insurance contribution and 0·15 percentage points of the employer's standard 10·45 percent. contribution. When the time comes to make the rerating order, obviously my right hon. Friends the Secretary of State for Social Services and the Chancellor will have to look at the total make up of what is required to finance all the national insurance funds.

Mr. Prescott: Put up the rates. That is another £200 million.

Mr. Clarke: The rates might even come down.
The fund is in surplus and, obviously, payments are not likely to go down. That is only one part of the picture. Under the present arrangements, all Governments have to consider all the components of the overall contribution together if they are to make any sensible changes. We cannot do that until the autumn.
It has been said that we are stealing the money from the fund. All sorts of allegations have been made. Obviously, some hon. Members have a vision of a swag bag being put over someone's shoulder and carried away.

Mr. Prescott: £200 million.

Mr. Clarke: Thanks to the accounting convention used by Governments, this is one of those marvellous public spending savings where we do not take away any money from the fund.
Changing the rebate entitlements in August, rather than next April, does not cost the fund any money. The £140 million which is saved stays in the fund and earns interest for the fund. But the reduction in public expenditure, which counts now, enables us to boost our spending on the positive employment measures which we announced in one instalment last November and again in this year's Budget.
For those reasons, I ask the House to accept that the new clause and the amendment which are designed to alter the time when a change comes into effect—I cannot believe that any hon. Member would contemplate reversing that—are misconceived and should be rejected.
The hon. Members for Sheffield, Central (Mr. Caborn), for Wentworth (Mr. Hardy), for Kingston upon Hull, East (Mr. Prescott) and for Sheffield, Hillsborough (Mr. Flannery) have raised a matter on behalf of the south Yorkshire passenger transport executive, and it is relevant also to the west midlands passenger transport executive and other such bodies. They are concerned with the impact on those groups if the Bill becomes operative in August and with possible redundancies that those PTEs will have to make as they prepare to make themselves more competitive and face up to the new position in the autumn. The hon. Member for Kingston upon Hull, East thought that this matter arose out of legislation we used to debate when we both spoke on transport Bills. We disagreed on the deregulation of coach transport and I have no doubt that we disagree in the same way about the deregulation of local bus services. I am an enthusiastic supporter of the recent Transport Act and I believe that improvements will come from deregulation.
9.30 pm
I do not think that the hon. Member for Kingston upon Hull, East or I would claim to have bang up-to-date knowledge of all the technical details which flowed from the Transport Bill, on which we were not directly engaged. I do not know that within the passenger transport authorities the PTEs are looking to a date when they will become separate entities with their own trading accounts. There is a tendering exercise to go through in the summer before we will know the full extent of the services available in south Yorkshire, the west midlands and elsewhere. I will not be drawn into debating the transport

policies of the south Yorkshire passenger transport authority. I am on record as having discussed that in the past. I regarded the business of freezing the fares to some set date, which I believe was back in the 1960s, as absurd and loading the Government with subsidy and the ratepayers of Sheffield with an unnecessary burden. That is all behind us.
Having listened to the speeches, I know hon. Members obviously feel very strongly that a problem is being faced by the passenger transport authority. I have had some talks with my right hon. Friend the Secretary of State for Transport following the exchanges that took place between my hon. Friend the Under-Secretary and others in Committee and I shall certainly continue those discussions. Some of the figures bandied about as to the costs struck me as extraordinary. If, in order to enter the new competition, redundancies are contemplated, costs will obviously arise and the effect of those costs on passenger transport undertakings will depend on the day on which they take effect. I was asked some questions about that. If the redundancy is one of which notice has been given and which has taken effect before 1 August, rebate will be payable. If there is a late claim, after 1 August, but the redundancy became due before that date again, rebate will be payable. Thereafter, rebate will not be payable.
Until the tendering exercise has been undertaken, hon. Members cannot make assertions about what services they will or will not have, as the hon. Member for Barnsley. West and Penistone tried to do, and nobody can calculate with precision how many redundancies might be necessary. I have not claimed expertise on this matter. I have undertaken to consider the points made by the members from Yorkshire arid the west midlands and to continue discussions with my right hon. Friend the Secretary of State for Transport to ensure that an announcement is made on behalf of the Government in time for consideration in another place.

Mr. Allen McKay: Is a correct that the Minister accepts that people made redundant before 1 August will be subject to rebate but those made redundant after 1 August will not? I do not accept the right hon. and learned Gentleman's arguments because one has to plan 12 months or two years ahead and, irrespective of what the Minister says, at least 1,600 people will be made redundant, even in the best scenario. Is the right hon. and learned Gentleman saying that, if notice is given before 1 August that the PTE is expecting 1,600 redundancies in October, they will receive a rebate?

Mr. Clarke: If the notice is given and dismissal on the grounds of redundancy takes place before 1 August and the claim is made the rebate will be received. I shall happily continue to attend to those details and I know that my right hon. Friend the Secretary of State for Transport is considering the matter. As I have said, an announcement will be made on behalf of the Government.

Mr. Hardy: I recognise that the Minister appears to be moving in the direction of concession, but I should like to tie him down just a little. Does he not accept that he needs to consult the Secretary of State for Transport to establish one thing above all—that the Department of Transport, in effect, endorsed the plans for redundancies, which were under way in the passenger transport executives before the


Bill received Second Reading? If the Secretary of State for Transport accepts that that was the case, the moral obligation on the Government is unanswerable.

Mr. Clarke: Before the hon. Gentleman assumes that I am moving in the direction of concession, I should like to tell him that, for example, to concede new clause 6 would cost about £140 million if it delayed the implementation of the change until April 1987, which it would at the earliest. To concede amendment No. 80 would cost £55 million of public expenditure, if we moved the implementation from August to November. No doubt many other industries would find that they would benefit from rebates if we chose the month of November, and they would not if we chose August. Because of the political position of transport and its position vis-à-vis local authorities and central Government, the south Yorkshire passenger transport executive has its usual ability to beat its way to the Chamber of the House of Commons, unlike other industries.
Nevertheless, what is being said is that it is the Government's policies and the two pieces of legislation that are giving rise to the problem. I have undertaken to do pretty well what the hon. Member for Wentworth (Mr. Hardy) repeated—to carry on consultations, which I have already begun, with my right hon. Friend the Secretary of State for Transport. The Government will honour any obligations that it may transpire we have towards the passenger transport authorities. We shall look at the concessions with care.
Hon. Members will want to know at what stage an announcement will be made so that it can be considered. I hope that an announcement will be made on behalf of the Government before consideration begins in another place. On that basis, we can defer the argument and the battle—if there has to be one—about the passenger transport authorities to a later stage. I ask the House to reject the new clause and the amendment, on the narrower point.

Question put, That the clause be read a Second time:—

The House divided: Ayes 155, Noes 203.

Division No. 182]
[9.37 pm


AYES


Abse, Leo
Campbell-Savours, Dale


Adams, Allen (Paisley N)
Carter-Jones, Lewis


Archer, Rt Hon Peter Clark, Dr David (S Shields)


Ashley, Rt Hon Jack
Clarke, Thomas


Ashton, Joe
Clay, Robert


Atkinson, N. (Tottenham)
Clelland, David Gordon


Bagier, Gordon A. T.
Clwyd, Mrs Ann


Banks, Tony (Newham NW)
Cohen, Harry


Barnett, Guy
Cook, Frank (Stockton North)


Barron, Kevin
Cook, Robin F. (Livingston)


Beckett, Mrs Margaret
Corbyn, Jeremy


Bell, Stuart
Cox, Thomas (Tooting)


Benn, Rt Hon Tony
Craigen, J. M.


Bermingham, Gerald
Cunliffe, Lawrence


Bidwell, Sydney
Cunningham, Dr John


Blair, Anthony
Davis, Terry (B'ham, H'ge H'l)


Boothroyd, Miss Betty
Deakins, Eric


Boyes, Roland
Dobson, Frank


Bray, Dr Jeremy
Dormand, Jack


Brown, Gordon (D'f'mline E)
Duffy, A. E. P.


Brown, Hugh D. (Provan)
Dunwoody, Hon Mrs G.


Brown, N. (N'c'tle-u-Tyne E)
Eadie, Alex


Brown, Ron (E'burgh, Leith)
Eastham, Ken


Buchan, Norman
Edwards, Bob (W'h'mpt'n SE)


Caborn, Richard
Evans, John (St. Helens N)


Callaghan, Jim (Heyw'd &amp; M)
Faulds, Andrew





Field, Frank (Birkenhead)
Millan, Rt Hon Bruce


Fisher, Mark
Miller, Dr M. S. (E Kilbride)


Flannery, Martin
Morris, Rt Hon A. (W'shawe)


Forrester, John
Morris, Rt Hon J. (Aberavon)


Foster, Derek
Nellist, David


Foulkes, George
Oakes, Rt Hon Gordon


Fraser, J. (Norwood)
O'Brien, William


Freud, Clement
O'Neill, Martin


George, Bruce
Orme, Rt Hon Stanley


Godman, Dr Norman
Park, George


Golding, John
Parry, Robert


Gould, Bryan
Patchett, Terry


Hamilton, James (M'well N)
Pavitt, Laurie


Hamilton, W. W. (Fife Central)
Pendry, Tom


Hancock, Michael
Penhaligon, David


Hardy, Peter
Pike, Peter


Harrison, Rt Hon Walter
Prescott, John


Hart, Rt Hon Dame Judith
Randall, Stuart


Haynes, Frank
Raynsford, Nick


Heffer, Eric S.
Redmond, Martin


Hogg, N. (C'nauld &amp; Kilsyth)
Rees, Rt Hon M. (Leeds S)


Holland, Stuart (Vauxhall)
Richardson, Ms Jo


Home Robertson, John
Roberts, Ernest (Hackney N)


Hoyle, Douglas
Robertson, George


Hughes, Dr Mark (Durham)
Rogers, Allan


Hughes, Robert (Aberdeen N)
Rooker, J. W.


Hughes, Roy (Newport East)
Ross, Ernest (Dundee W)


Janner, Hon Greville
Rowlands, Ted


John, Brynmor
Sedgemore, Brian


Kennedy, Charles
Shore, Rt Hon Peter


Kilroy-Silk, Robert
Short, Ms Clare (Ladywood)


Lambie, David
Silkin, Rt Hon J.


Lamond, James
Skinner, Dennis


Leadbitter, Ted
Snape, Peter


Lewis, Terence (Worsley)
Spearing, Nigel


Litherland, Robert
Steel, Rt Hon David


Lloyd, Tony (Stretford)
Strang, Gavin


Lofthouse, Geoffrey
Straw, Jack


McDonald, Dr Oonagh
Thomas, Dafydd (Merioneth)


McKay, Allen (Penistone)
Tinn, James


McKelvey, William
Torney, Tom


McNamara, Kevin
Wareing, Robert


McTaggart, Robert
Weetch, Ken


Madden, Max
Welsh, Michael


Marek, Dr John
Wigley, Dafydd


Marshall, David (Shettleston)
Williams, Rt Hon A.


Martin, Michael
Wilson, Gordon


Mason, Rt Hon Roy
Winnick, David


Maxton, John
Young, David (Bolton SE)


Maynard, Miss Joan



Meacher, Michael
Tellers for the Ayes:


Meadowcroft, Michael
Mr. Don Dixon and Mr. Ray Powell.


Michie, William



Mikardo, Ian





NOES


Aitken, Jonathan
Browne, John


Amess, David
Bruinvels, Peter


Ashby, David
Bryan, Sir Paul


Atkinson, David (B'm'th E)
Bulmer, Esmond


Baker, Nicholas (Dorset N)
Burt, Alistair


Baldry, Tony
Butler, Rt Hon Sir Adam


Banks, Robert (Harrogate)
Butterfill, John


Batiste, Spencer
Carlisle, John (Luton N)
 
Bellingham, Henry
Carlisle, Kenneth (Lincoln)


Bendall, Vivian
Carttiss, Michael


Bevan, David Gilroy
Cash, William


Biggs-Davison, Sir John
Chapman, Sydney


Blackburn, John
Chope, Christopher


Body, Sir Richard
Clark, Dr Michael (Rochford)


Boscawen, Hon Robert
Clark, Sir W. (Croydon S)


Bottomley, Mrs Virginia
Clarke, Rt Hon K. (Rushcliffe)


Bowden, A. (Brighton K'to'n)
Clegg, Sir Walter


Bowden, Gerald (Dulwich)
Cockeram, Eric


Braine, Rt Hon Sir Bernard
Colvin, Michael


Brandon-Bravo, Martin
Coombs, Simon


Bright, Graham
Cope, John


Brinton, Tim
Couchman, James


Brooke, Hon Peter
Cranborne, Viscount


Brown, M. (Brigg &amp; Cl'thpes)
Critchley, Julian






Crouch, David
Lyell, Nicholas


Currie, Mrs Edwina
McCrindle, Robert


Dickens, Geoffrey
MacGregor, Rt Hon John


Dorrell, Stephen
MacKay, Andrew (Berkshire)


Dover, Den
Maclean, David John


Durant, Tony
McNair-Wilson, M. (N'bury)


Dykes, Hugh
McNair-Wilson, P. (New F'st)


Evennett, David
Major, John


Eyre, Sir Reginald
Malins, Humfrey


Fallon, Michael
Maples, John


Favell, Anthony
Marland, Paul


Fookes, Miss Janet
Marlow, Antony


Forman, Nigel
Mates, Michael


Forth, Eric
Mather, Carol


Freeman, Roger
Maude, Hon Francis


Fry, Peter
Mayhew, Sir Patrick


Gale, Roger
Merchant, Piers


Galley, Roy
Miller, Hal (B'grove)


Gardiner, George (Reigate)
Mills, Iain (Meriden)


Gardner, Sir Edward (Fylde)
Mitchell, David (Hants NW)


Garel-Jones, Tristan
Moate, Roger


Glyn, Dr Alan
Montgomery, Sir Fergus


Goodhart, Sir Philip
Moynihan, Hon C.


Gorst, John
Mudd, David


Greenway, Harry
Murphy, Christopher


Gregory, Conal
Neale, Gerrard


Griffiths, Sir Eldon
Nelson, Anthony


Griffiths, Peter (Portsm'th N)
Newton, Tony


Ground, Patrick
Nichotls, Patrick


Grylls, Michael
Norris, Steven


Hamilton, Hon A. (Epsom)
Oppenheim, Phillip


Hamilton, Neil (Tatton)
Oppenheim, Rt Hon Mrs S.


Hampson, Dr Keith
Osborn, Sir John


Hanley, Jeremy
Page, Richard (Herts SW)


Hargreaves, Kenneth
Patten, J. (Oxf W &amp; Abgdn)


Harris, David
Pawsey, James


Haselhurst, Alan
Percival, Rt Hon Sir Ian


Hawkins, C. (High Peak)
Portillo, Michael


Hawkins, Sir Paul (N'folk SW)
Powell, William (Corby)


Hawksley, Warren
Powley, John


Hayhoe, Rt Hon Barney
Price, Sir David


Hayward, Robert
Proctor, K. Harvey


Heathcoat-Amory, David
Raffan, Keith


Heseltine, Rt Hon Michael
Rathbone, Tim


Hickmet, Richard
Renton, Tim


Hicks, Robert
Rhodes James, Robert


Hind, Kenneth
Rhys Williams, Sir Brandon


Hogg, Hon Douglas (Gr'th'm)
Robinson, Mark (N'port W)


Holland, Sir Philip (Gedling)
Roe, Mrs Marion


Holt, Richard
Rost, Peter


Howard, Michael
Sainsbury, Hon Timothy


Howarth, Alan (Stratf'd-on-A)
Sayeed, Jonathan


Howarth, Gerald (Cannock)
Shaw, Giles (Pudsey)


Howell, Rt Hon D. (G'ldford)
Skeet, Sir Trevor


Howell, Ralph (Norfolk, N)
Smith, Sir Dudley (Warwick)


Hubbard-Miles, Peter
Soames, Hon Nicholas


Hunt, David (Wirral W)
Spencer, Derek


Hunter, Andrew
Stokes, John


Jessel, Toby
Taylor, Teddy (S'end E)


Johnson Smith, Sir Geoffrey
Thompson, Donald (Calder V)


Jones, Gwilym (Cardiff N)
Thompson, Patrick (N'ich N)


Jones, Robert (Herts W)
Thome, Neil (Ilford S)


Key, Robert
Trippier, David


King, Rt Hon Tom
Viggers, Peter


Knight, Greg (Derby N)
Wakeham, Rt Hon John


Knight, Dame Jill (Edgbaston)
Waller, Gary


Knowles, Michael
Wardle, C. (Bexhill)


Knox, David
Watts, John


Lamont, Norman
Wells, Bowen (Hertford)


Latham, Michael
Wheeler, John


Lawler, Geoffrey
Whitfield, John


Lawrence, Ivan
Whitney, Raymond


Leigh, Edward (Gainsbor'gh)
Wilkinson, John


Lewis, Sir Kenneth (Stamf'd)
Wood, Timothy


Lightbown, David
Yeo, Tim


Lilley, Peter



Lloyd, Ian (Havant)
Tellers for the Noes:


Lloyd, Peter (Fareham)
Mr. Mark Lennox-Boyd and Mr. Michael Neubert.


Lord, Michael



Luce, Rt Hon Richard

Question accordingly negatived.

Schedule 6

TRANSITIONAL PROVISIONS AND SAVINGS

Amendments made: No. 78, in page 38, leave out lines 17 and 18 and insert
'for the time being fixed in relation to the worker by an order made under section 14 of the 1979 Act or (as the case may be) by a permit granted under section 16(1) of that Act'.

No. 79, in page 39, line 5, at end insert—

'Saving for accrued rights under wages orders

5A.—(1) In the case of any provision contained in an order under section 14 of the 1979 Act and ceasing to have effect (whether wholly or in part) at any time in accordance with section 23 of this Act, the Secretary of State may by order provide, for the purpose of preserving the effect of rights accruing under that provision before that time, for that provision to continue in force as front that time subject to such modifications and transitional provisions as may be specified in the order.

(2) A provision contained in an order under this paragraph may be made with retrospective effect as from the date on which this Act is passed or any later date.

(3) Any order under this paragraph shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.'.—[Mr. Kenneth Clarke.]

Order for Third Reading read.

Motion made, and Question proposed, That the Bill be now read the Third time.—[Mr. Kenneth Clarke.]

[Queen's consent and Prince of Wales's consent signified.]

Mr. Prescott: Of all the Bills that have been brought before the House in the seven years of this Tory Government, this must be the most despicable. By the Government's own admission, it is designed to deregulate and to reduce the wages of people in the lowest paid industries in the country—shops, hotels, restaurants and hairdressing. Previous Tory Governments have felt that there should be laws to prevent exploitation and the development of the sweatshops, which are beginning to emerge.
The Bill dispels any doubt about whether Britain is departing from normal civilised standards. It means that the Government are denouncing international obligations. We will be the only one to do so out of the 94 countries which signed an International Labour Organisation convention recognising that certain trades are poorly organised, poorly paid and liable to exploitation. All the signatory countries agreed to introduce legislation to provide reasonable and fair conditions in those industries but, to our eternal shame, Britain alone has denounced those obligations. It is just another denunciation of international standards. We have done it far more than any other civilised country.
By any criteria, the Bill is mean and despicable. It concentrates all the power of the law against people in the lowest-paid occupations. The Paymaster General knows that we are talking about people who earn £40 or £50 a week. The Bill is designed to drive even those rates further down, as the rejection of our amendments has shown.
The Tories claim to be the party of law and order. They have lectured us all about obeying the law, but there have been very few prosecutions under present legislation for paying miserable wages. The Opposition have proposed amendments which would have strengthened the controls


to ensure that agreed rates are enforced, but the Government have rejected those amendments. That is consistent with the 40 per cent. reduction in the number of wages inspectors. Many employers save millions of pounds which they should pay to their employees, by flouting the law.
The Bill is consistent with the Government's approach. They believe that the poor will work harder if they are paid less, but that the wealthy need to be paid more to work harder. It is no wonder that unemployment has increased, as the figures published today show. We are beginning to witness a divided nation. All that rubbish about St. Francis of Assisi when the Prime Minister came into No. 10 should be contrasted with the reality of a divided and bitter nation. The Government are wiping their hands of their responsibilities to provide work and choose to make low pay the solution to our problems.
The Paymaster General paid us a compliment today. The Labour party launched its alternative fair wage strategy yesterday, and the right hon. and learned Gentleman knows that the British people have a sense of fairness and believe that people should have a fair return for their work. They do not want Britain to return to sweatshop industries and child labour. That is what the Bill is about, however. We are proud to have opposed it. A Labour Government will use the law on behalf of the poor to guarantee them a reasonable standard of living. The House has an obligation to do that, but has flunked it tonight by introducing this pernicious legislation.

Mr. Holt: The Bill on which we are about to pass judgment will abolish the Truck Acts which have existed since 1831 and have been good law for more than 150 years. When they were introduced some hon. Member probably said, "Hurry up. Get on with it, sit down, and let everyone go home," but they have affected the lives of many people during those years.
I have grave reservations about the legislation, especially those parts which refer to industrial tribunals. As the House will know, I have taken a considerable interest in the workings of industrial tribunals, and have spoken many times on the subject. I do not believe that the addition of the nonsense contained in part II to the burden on industrial tribunals will increase the protection of workers. Indeed, in many ways it is a smoke screen which will reduce some of the present protection.
I am not sure that industrial tribunals want that additional responsibility. Since 1961 and trade levies, whenever the Department of Employment has needed to find a repository for anything, it has found one in industrial tribunals, so that today we have case after case on subjects which I am sure it was never dreamt would come before them. I doubt whether those who passed the legislation which set up industrial tribunals for unfair dismissal thought that the tribunals would try the case of a singing rabbi or of a dismissed football manager, yet those are the realms with which they deal. I am worried that, when we initiate such legislation, we do not know how far it will go.
At this stage hon. Members who have not listened to our debates in Committee or on the Floor of the House have an opportunity to realise the importance of the vote that we are about to hold. The complete abolition of the

Truck Acts was not generally canvassed. Indeed, I suspect that most people thought that the Wages Bill would cover wages councils only, and that many hon. Members would not choose to vote for the other aspects of the Bill. Now they are, perhaps, understanding for the first time what it is they are being asked to vote for—the abolition of payment in cash and in the coin of the realm.
Even at this late hour it is important for me to put that on the record, so that someone in the other place may have the wisdom to consider it and prevail on the Government not to pursue this line of enabling everyone to go to an industrial tribunal on what may well be a minor matter. If an employer deducts £6 a week from an employee when he should be deducting only £5, that employee will have, enshrined in legislation, an opportunity to take the matter to an industrial tribunal. In other words, an employee may go to a tribunal for the sake of £1 a week at a cost of thousands of pounds a day for the tribunal. I do not believe that the Government have thought that matter through.
If an employer and employee are in dispute about sums that have been paid or deducted within the areas covered by the Bill, there must be another mechanism to deal with it which is simple, quick and acceptable to both parties. Industrial tribunals are not acceptable to both parties. Employers' organisations and trade union organisations have criticisms of them.

Mr. Nellist: On a point of order, Mr. Speaker. Do I remember correctly that yesterday you gave a hint, if not a ruling, that those who sought to oppose a ten-minute rule Bill without dividing the House had your displeasure? Does that apply equally to those who seek to speak on Third Reading with no intention of voting against the Bill, as the hon. Member for Langbaurgh (Mr. Holt) has done for the last three months in Committee?

Mr. Speaker: They are totally different criteria. This is a Third Reading, not a ten-minute rule Bill.

Mr. Holt: The laws of the land are in our hands. People look to us to make good laws. They look to us not to see whether it is time to catch the train home, but to make sure that what we are doing is right. I believe that it is wrong—

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,
That, at this day's sitting, the Wages Bill may be proceeded with, though opposed, until any hour.—[Mr. Archie Hamilton.]

Wages Bill

Question again proposed, That the Bill be now read the Third time.

Mr. Holt: I do not wish to detain the House much longer—[Interruption.] However, I am going to detain the House long enough to make sure that every hon. Member on the Conservative Benches at least knows what he or she is voting for.
I am not sure that everybody has studied in detail the ramifications of what will happen when industrial tribunals are looking into what deductions will be made. I doubt at this stage whether we can manage to read all the documentation that comes to us. We rely on hon. Members who serve in Committee and on experts to help and guide


us. I am not satisfied that that has been done in the case of industrial tribunals. I believe that they are over-legalistic, as I have said repeatedly.
I have had a commitment from the Front Bench that the Government will look into the working of industrial tribunals but, instead of doing that, they are adding to the workings. It is on average 13½weeks before a worker can take a complaint to a tribunal, which is not satisfactory. I think that—

Ms. Clare Short: Boring.

Mr. Speaker: Order. We have just passed the 10 o'clock business motion. The hon. Gentleman has a right to be heard.

Mr. Holt: In the last few days, industrial tribunal decisions have been made by the most learned in the land which have overturned quite important previous decisions. I believe that we are opening up a floodgate of legislation in which so-called protection will be given to workers which will not be acceptable in practical terms.
The Government ought to have considered another method to afford the opportunity of a speedy and proper judgment to those who feel they have been disadvantaged. It will not help to impose a delay of 14 to 15 weeks before cases that have a 10 per cent. ceiling on them can come to court. I cannot believe that those who are responsible for advising the Minister have taken this point on board.
In 1965 the number of books on industrial relations to be found on any lawyer's shelf would total one; today they fill the wall. There will soon be a similar increase in the load on the subject of deductions of money from employees.
No area of the business community has asked for this, yet the Government seek to bring it in. We will make a laughing stock of ourselves if we introduce legislation that provides the opportunity for employees to go to an industrial tribunal for what will he trivial sums of money—£3 to £4. It will lead to industrial tribunals having a greater backlog of work, and the whole system will fall into disrepute. I hope that when the Bill goes to the other place, their lordships will, in their wisdom, find an opportunity not to send all these cases to industrial tribunals.

Mr. Penhaligon: Few things deserve more genuine admiration than a Member who dedicates himself to trying to make sure that we understand the legislation on which we shall vote. It is odd in this case that the hon. Member for Langbaurgh (Mr. Holt) understands the Bill decides that he does not like it, but still will vote for it. The hon. Gentleman's attitude is astonishing, to say the least.
One of the great privileges given to Ministers of the Crown, Secretaries of State and the Paymaster General is the power to protect the vulnerable. That is one of the most honourable and justifying reasons for our system of Government. Since 1909 one of the vulnerable sections has generally been agreed to be the low paid. Repeatedly since 1909 we have tried to protect them from the worst exploitation by wages councils legislation. The Bill removes the most vulnerable part of the low-paid sector from protection—those under 21.
The Minister has made a number of speeches, and we have had a number of debates, but nobody has yet given me satisfactory reason to believe that the abolition of such

protection will achieve the objects for which the Minister has argued. He has identified a problem: there are times when paying an 18-year-old the adult rate militates against that young person's opportunity to obtain employment. That calls for a modification of the law on wages councils, not their abolition. However, the Government have decided on abolition.
Nobody can defend a person aged between 16 and 20 from the most outrageous exploitation. The Under-Secretary has failed by allowing the legislation to be put before the House. Given his record on a number of issues, I am surprised that he has done so, because some of us regard him as nearly civilised, compared to the peculiar company that he keeps. I am amazed by what he has done. This is a bad day, and bad legislation. Many people between the ages of 16 and 20 will regret the day that the Bill was passed. They will remember it, and we shall remind them of it.
Any Parliament other than one dominated by a Conservative Government elected by just 42 per cent. of the electorate will bring back some protection for those people.

Mr. Kenneth Clarke: If we are to maintain the present growth in the economy and in employment opportunities, we have to continue to work at being a modern labour market. The Bill is a useful package of reforms that takes away various obsolete legal requirements, and will improve employment opportunities for a number of people and young people in particular.
I point out to my hon. Friend the Member for Langbaurgh (Mr. Holt) that the repeal of the Truck Acts of 1831 is a little overdue, and, if it had been done before today, it would have enabled us to move towards more sensible methods of making payments. We have introduced new protection for those who are liable to deductions from pay in the retail trade, and I do not share his fear about the working of the industrial tribunal system.
By ending the rebate system, we shall be taking off the statute book an outdated law. It is no longer necessary to make it cheaper and easier to make people redundant, and public money can be spent on employment measures in more positive ways.
Our aim is to improve employment opportunities. We are not abolishing wages councils. We are retaining protection for adult workers and making the orders more simple. We are taking away the present complex and sometimes unintelligible rigmarole that surrounds the details of wages orders, whereby every aspect of employment for every employee is fixed by a panel of people in terms that are difficult to apply in practice. We shall still enforce it with the inspectorate, although there will be fewer inspectors because fewer workers will be covered, and the orders will be simpler. The method of enforcing the law will be exactly the same as that used by the previous Government, and so will the style of the wages inspectorate. Labour party spokesmen have argued for an approach to this legislation that they never followed when they were in power.
There has been a welcome reduction in the rate of youth unemployment. During the past three or four years, there has been a reduction in the rate of unemployment among young people compared with the adult rate. That has arisen because we have a more sensible understanding of the


relationship between the wages earned by young people in their first jobs out of school and the wages earned by more experienced adults.
The wages councils have no contribution to make in that area. Far from exposing youngsters to risk, we are ensuring that their employment opportunities will be increased.
It is the tradition on Third Reading to make short speeches. Usually the Minister says that this is the finest piece of legislation to pass through the House in modern times. Usually the Labour spokesman says that he cannot, in his entire Parliamentary career, remember a worse case of grinding the faces of the poor. In reality, and considering the contents of the Bill, this is a sensible and, and most cases, a much overdue reform of obsolete bits of present employment law, and I commend it to the House.

Question put, That the Bill be now read the Third time:—

The House divided: Ayes 214, Noes 160.

Division No. 183]
[10.10 pm


AYES


Aitken, Jonathan
Critchley, Julian


Amess, David
Crouch, David


Ashby, David
Currie, Mrs Edwina


Atkinson, David (B'm'th E)
Dickens, Geoffrey


Baker, Nicholas (Dorset N)
Dorrell, Stephen


Baldry, Tony
Dover, Den


Banks, Robert (Harrogate)
Durant, Tony


Batiste, Spencer
Dykes, Hugh


Bellingham, Henry
Evennett, David


Bendall, Vivian
Eyre, Sir Reginald


Bevan, David Gilroy
Fallon, Michael


Biffen, Rt Hon John
Favell, Anthony


Biggs-Davison, Sir John
Fookes, Miss Janet


Blackburn, John
Forman, Nigel


Body, Sir Richard
Forth, Eric


Boscawen, Hon Robert
Freeman, Roger


Bottomley, Mrs Virginia
Fry, Peter


Bowden, A. (Brighton K'to'n)
Gale, Roger


Bowden, Gerald (Dulwich)
Galley, Roy


Braine, Rt Hon Sir Bernard
Gardiner, George (Reigate)


Brandon-Bravo, Martin
Gardner, Sir Edward (Fylde)


Bright, Graham
Garel-Jones, Tristan


Brinton, Tim
Glyn, Dr Alan


Brooke, Hon Peter
Goodhart, Sir Philip


Brown, M. (Brigg &amp; Cl'thpes)
Gorst, John


Browne, John
Greenway, Harry


Bruinvels, Peter
Gregory, Conal


Bryan, Sir Paul
Griffiths, Sir Eldon


Budgen, Nick
Griffiths, Peter (Portsm'th N)


Bulmer, Esmond
Ground, Patrick


Burt, Alistair
Grylls, Michael


Butler, Rt Hon Sir Adam
Hamilton, Hon A. (Epsom)


Butterfill, John
Hamilton, Neil (Tatton)


Carlisle, John (Luton N)
Hampson, Dr Keith


Carlisle, Kenneth (Lincoln)
Hanley, Jeremy


Carttiss, Michael
Hargreaves, Kenneth


Cash, William
Harris, David


Chapman, Sydney
Haselhurst, Alan


Chope, Christopher
Hawkins, C. (High Peak)


Churchill, W. S.
Hawkins, Sir Paul (N'folk SW)


Clark, Dr Michael (Rochford)
Hawksley, Warren


Clark, Sir W. (Croydon S)
Hayes, J.


Clarke, Rt Hon K. (Rushcliffe)
Hayhoe, Rt Hon Barney


Clegg, Sir Walter
Hayward, Robert


Cockeram, Eric
Heathcoat-Amory, David


Colvin, Michael
Heddle, John


Coombs, Simon
Heseltine, Rt Hon Michael


Cope, John
Hickmet, Richard


Couchman, James
Hicks, Robert


Cranborne, Viscount
Hind, Kenneth





Hogg, Hon Douglas (Gr'th'm)
Nelson, Anthony


Holland, Sir Philip (Gedling)
Neubert, Michael


Holt, Richard
Newton, Tony


Howard, Michael
Nicholls, Patrick


Howarth, Alan (Stratf'd-on-A)
Norris, Steven


Howarth, Gerald (Cannock)
Onslow, Cranley


Howell, Rt Hon D. (G'ldford)
Oppenheim, Phillip


Howell, Ralph (Norfolk, N)
Oppenheim, Rt Hon Mrs S.


Hubbard-Miles, Peter
Osborn, Sir John


Hunt, David (Wirral W)
Ottaway, Richard


Hunter, Andrew
Page, Richard (Herts SW)


Jessel, Toby
Patten, J. (Oxf W &amp; Abgdn)


Johnson Smith, Sir Geoffrey
Pattie, Geoffrey


Jones, Gwilym (Cardiff N)
Pawsey, James


Jones, Robert (Herts W)
Percival, Rt Hon Sir Ian


Kershaw, Sir Anthony
Portillo, Michael


Key, Robert
Powell, William (Corby)


King, Rt Hon Tom
Powley, John


Knight, Greg (Derby N)
Price, Sir David


Knight, Dame Jill (Edgbaston)
Proctor, K. Harvey


Knowles, Michael
Raffan, Keith


Knox, David
Rathbone, Tim


Lamont, Norman
Renton, Tim


Latham, Michael
Rhodes James, Robert


Lawler, Geoffrey
Rhys Williams, Sir Brandon


Lawrence, Ivan
Ridley, Rt Hon Nicholas


Leigh, Edward (Gainsbor'gh)
Robinson, Mark (N'port W)


Lennox-Boyd, Hon Mark
Roe, Mrs Marion


Lewis, Sir Kenneth (Stamf'd)
Rossi, Sir Hugh


Lightbown, David
Rost, Peter


Lilley, Peter
Sayeed, Jonathan


Lloyd, Ian (Havant)
Shaw, Giles (Pudsey)


Lloyd, Peter (Fareham)
Skeet, Sir Trevor


Lord, Michael
Smith, Sir Dudley (Warwick)


Luce, Rt Hon Richard
Soames, Hon Nicholas


Lyell, Nicholas
Spencer, Derek


McCrindle, Robert
Stokes, John


MacGregor, Rt Hon John
Taylor, Teddy (S'end E)


MacKay, Andrew (Berkshire)
Thompson, Donald (Caider V)


Maclean, David John
Thompson, Patrick (N'ich N)


McNair-Wilson, M. (N'bury)
Thorne, Neil (Ilford S)


McNair-Wilson, P. (New F'st)
Trippier, David


Major, John
Viggers, Peter


Malins, Humfrey
Wakeham, Rt Hon John


Maples, John
Walker, Rt Hon P. (W'cester)


Marlow, Antony
Waller, Gary


Mates, Michael
Wardle, C. (Bexhill)


Mather, Carol
Watts, John


Mayhew, Sir Patrick
Wells, Bowen (Hertford)


Merchant, Piers
Wheeler, John


Miller, Hal (B'grove)
Whitfield, John


Mills, Iain (Meriden)
Whitney, Raymond


Mitchell, David (Hants NW)
Wilkinson, John


Moate, Roger
Wood, Timothy


Montgomery, Sir Fergus
Yeo, Tim


Moynihan, Hon C.



Mudd, David
Tellers for the Ayes:


Murphy, Christopher
Mr. Tim Sainsbury and Mr. Francis Maude.


Neale, Gerrard





NOES


Adams, Allen (Paisley N)
Brown, Hugh D. (Provan)


Archer, Rt Hon Peter
Brown, N. (N'c'tle-u-Tyne E)

 Ashley, Rt Hon Jack
Brown, Ron (E'burgh, Leith)


Ashton, Joe
Buchan, Norman


Atkinson, N. (Tottenham)
Caborn, Richard


Bagier, Gordon A. T.
Callaghan, Jim (Heyw'd &amp; M)


Banks, Tony (Newham NW)
Campbell-Savours, Dale


Barnett, Guy
Carter-Jones, Lewis


Barron, Kevin
Clark, Dr David (S Shields)


Beckett, Mrs Margaret
Clarke, Thomas


Bell, Stuart
Clay, Robert


Benn, Rt Hon Tony
Clelland, David Gordon


Bermingham, Gerald
Clwyd, Mrs Ann


Bidwell, Sydney
Cohen, Harry


Blair, Anthony
Cook, Frank (Stockton North)


Boothroyd, Miss Betty
Cook, Robin F. (Livingston)


Boyes, Roland
Corbyn, Jeremy


Bray, Dr Jeremy
Cox, Thomas (Tooting)


Brown, Gordon (D'f'mline E)
Craigen, J. M.






Cunliffe, Lawrence
Mason, Rt Hon Roy


Cunningham, Dr John
Maxton, John


Davis, Terry (B'ham, H'ge H'l)
Maynard, Miss Joan


Deakins, Eric
Meacher, Michael


Dobson, Frank
Meadowcroft, Michael


Dormand, Jack
Michie, William


Dubs, Alfred
Mikardo, Ian


Duffy, A. E. P.
Millan, Rt Hon Bruce


Dunwoody, Hon Mrs G.
Miller, Dr M. S. (E Kilbride)


Eadie, Alex
Morris, Rt Hon A. (W'shawe)


Eastham, Ken
Morris, Rt Hon J. (Aberavon)


Edwards, Bob (W'h'mpt'n SE)
Nellist, David


Evans, John (St. Helens N)
Oakes, Rt Hon Gordon


Faulds, Andrew
O'Brien, William


Field, Frank (Birkenhead)
O'Neill, Martin


Fisher, Mark
Orme, Rt Hon Stanley


Flannery, Martin
Park, George


Forrester, John
Parry, Robert


Foster, Derek
Patchett, Terry


Foulkes, George
Pavitt, Laurie


Fraser, J. (Norwood)
Pendry, Tom


Freud, Clement
Penhaligon, David


George, Bruce
Pike, Peter


Gilbert, Rt Hon Dr John
Powell, Raymond (Ogmore)


Godman, Dr Norman
Prescott, John


Golding, John
Radice, Giles


Gould, Bryan
Randall, Stuart


Hamilton, James (M'well N)
Raynsford, Nick


Hamilton, W. W. (Fife Central)
Redmond, Martin


Hancock, Michael
Rees, Rt Hon M. (Leeds S)


Hardy, Peter
Richardson, Ms Jo


Harrison, Rt Hon Walter
Roberts, Ernest (Hackney N)


Hart, Rt Hon Dame Judith
Robertson, George


Haynes, Frank
Rogers, Allan


Heffer, Eric S.
Rooker, J. W.


Hogg, N. (C'nauld &amp; Kilsyth)
Ross, Ernest (Dundee W)


Holland, Stuart (Vauxhall)
Rowlands, Ted


Home Robertson, John
Sedgemore, Brian


Hoyle, Douglas
Shore, Rt Hon Peter


Hughes, Dr Mark (Durham)
Short, Ms Clare (Ladywood)


Hughes, Robert (Aberdeen N)
Short, Mrs R.(W'hampt'n NE)


Hughes, Roy (Newport East)
Silkin, Rt Hon J.


Hughes, Simon (Southward)
Skinner, Dennis


John, Brynmor
Snape, Peter


Kennedy, Charles
Spearing, Nigel


Kilroy-Silk, Robert
Stewart, Rt Hon D. (W Isles)


Lambie, David
Strang, Gavin


Lamond, James
Straw, Jack


Lead bitter, Ted
Thomas, Dafydd (Merioneth)


Leighton, Ronald
Tinn, James


Lewis, Terence (Worsley)
Torney, Tom


Litherland, Robert
Wareing, Robert


Lloyd, Tony (Stretford)
Weetch, Ken


Lofthouse, Geoffrey
Welsh, Michael


McDonald, Dr Oonagh
Wigley, Dafydd


McKelvey, William
Williams, Rt Hon A.


MacKenzie, Rt Hon Gregor
Wilson, Gordon


McNamara, Kevin
Winnick, David


McTaggart, Robert
Young, David (Bolton SE)


Madden, Max



Marek, Dr John
Tellers for the Noes:


Marshall, David (Shettleston)
Mr. Don Dixon and Mr. Allen McKay.


Martin, Michael

Question accordingly agreed to

Bill read the Third time, and passed.

Orders of the Day — Ambulance Service (Bromley)

Motion made, and Question proposed. That this House do now adjourn—[Mr. Archie Hamilton.]

Mr. John Hunt: I am grateful to you, Mr. Speaker, for giving me this opportunity to draw attention to the recent very serious deterioration in Bromley's ambulance service. It is causing great distress and difficulty to many of my constituents. The story that I shall recount to the House is one of muddle and misjudgment by the London ambulance service, which apparently failed to foresee the consequences of its own recent decisions. I was first alerted to the potential problems at the beginning of this year, when a Bromley ambulance man, who is one of my constituents, warned me of the impact of the new rotas that had been agreed between management and the unions.
As a result, I wrote at once to the chairman of the South West Thames regional health authority, which, for reasons not immediately clear to me, administers the whole London ambulance service. At that time, my concern was primarily with emergency cover. In his reply, dated 6 February 1986, the chairman, Mr. Tony Driver, offered me considerable reassurance. He told me, for example, that for some months the authority had been looking into
A more efficient use of vehicles which would be more responsive to the pattern of demands.
The letter continued:
There will in fact be an overall increase in emergency cover.
Thus, I was reassured. But of course I had been told only half the story. It subsequently transpired that the cuts were being made not in emergency but non-emergency cover—the walking patients as they are sometimes called.
The cuts were in direct contradiction to specific assurances that had been given to my hon. Friend the Member for Chislehurst (Mr. Sims), who has also been actively engaged in these matters, but who is unfortunately overseas on parliamentary business tonight. My hon. Friend received a letter dated 25 February from the chief officer of the London ambulance service, in which he was told that special funding was being provided to meet the situation. As far as I am aware, no such funding has been made available.
It was about that time that I and other of my hon. Friends who represent constituencies in the borough of Bromley began to receive complaints from our constituents about the numerous cancellations and delays within the local ambulance service. I therefore wrote again to Mr. Driver on 22 April expressing some surprise that I had not been forewarned of the reductions, and telling him of their disastrous impact on my constituents.
At about the same time, the district general manager of Bromley health authority, Mr. P. A. Ward, wrote in similar terms to the regional general manager of the South-West Thames RHA. Mr. Ward expressed his serious concern at what he called "the sudden and unplanned" reduction in Bromley's ambulance service. His letter highlighted the draconian cuts that were being imposed.
Apparently, the original demand from the London ambulance service had been for an immediate reduction of 40 per cent. in non-emergency patients. That in itself' was bad enough, but by April the position had become immeasurably worse—a demand was made by the divisional ambulance officer for a reduction not of 40 per


cent. but of 70 per cent. in the service for walking patients. That represents a reduction in coverage from 513 patients a week to 163. It was, therefore, hardly surprising that the many patients affected were up in arms and wrote, and are still writing, to me and other Members of Parliament.
I wish to quote one letter from a young lady living in Hayes in my constituency. She said
I am writing to you about the ambulance cut backs. I am disabled and used to go to Guy's hospital in London by ambulance but I have been told that due to cut backs I cannot have transport any more. The hospital has tried to get me transport and so has my own doctor, but it has been to no avail, so I can't go to the hospital any more. I can't walk very far. I have arthritis in my legs and my hands.
That young girl of 23 is clearly suffering greatly.
In Bromley, ambulance service support has been withdrawn from the Phoenix centre for physically and mentally handicapped children at Farnborough hospital. That centre does magnificent work in providing therapeutic treatment for more than 20 severely handicapped children from all parts of the borough. Surely their parents have enough to cope with without the additional strain of having to make individual travel arrangements for them every day.

Mr. Humfrey Malins: I am sure that my hon. Friend is aware of the immensely successful hospital in Croydon, the Mayday, and the fantastic work that it does. However, is he aware that many consultants at the hospital have approached myself and other hon. Members representing Croydon constituencies because they are concerned about the effectiveness of the London ambulance service? They are worried about the problems with the service in the Croydon area.

Mr. Hunt: I am grateful to my hon. Friend, because his intervention emphasises how widespread the problem is. I do not wish in any way to suggest that it is confined only to Bromley; I know that it goes very much wider than that.
Another example in Bromley is the Stepping Stones club, which provides facilities for patients who are recovering from mental and other illnesses. Only this morning I received a letter from the chairman of the Bromley Council for Voluntary Service, His Honour Judge David Griffiths, expressing his concern at the withdrawal of ambulance service support. Part of his letter reads:
There appears to be severe cuts in ambulance service or community care and yet it appears to be Government policy to increase and encourage this very type of service.
That emphasises a policy contradiction in what is happening.
I have seen a copy of a letter sent by a distinguished ophthalmic surgeon in Bromley to various health authorities and hospitals expressing his great concern at the effect of the cuts on his patients. A section of his letter reads:
a high proportion of our patients are old and unable to use public transport, and unfortunately many of them have no relatives living locally and appear to have no neighbours who are able to help and hence rely entirely on the ambulance service to attend outpatients.
The letter continues:
As you will appreciate, these patients include those with long-term conditions, such as glaucoma, which need to be kept under review. There are also post-operative patient and it is essential we see these patients as required at the outpatient

clinics. If they cannot attend I can foresee that inevitably there will be disasters with regard to their treatment which could lead to diminution or even loss of their vision which would not be rectifiable.
That is what is happening in Bromley. It is inhuman and intolerable. Faced with this crisis. I am bound to say that I regard the response of the London ambulance service as both casual and complacent. I can only describe the most recent reply that I received from the chairman of the South West Thames regional health authority to my latest letter of protest as quite remarkable. I shall quote two sections of it. He wrote:
The London Ambulance Service has been faced with an almost impossible task since March as the introduction of the new structure had to be subject to a free vote of all ambulancemen before we, as the managers, would know whether it should be introduced and, following from that. the extent to which ambulancemen would then be willing to undertake over-time if required, could not have been foreseen.
Surely any competent and responsible ambulance authority would never have embarked upon a new structure of working until it had assessed the full impact of the new rotas upon the patients that it is there to serve. Mr. Driver's letter continues:
When the introduction of the new salaried structure was decided, we and the LAS between us wrote both to Regional and District General Managers throughout London pointing out that in the short-term the imbalance between need and availability could only be matched if the number of patient journeys could be radically reduced. The impact of this on individual patients was a matter which was largely in the hands of the Health Authorities themselves, since they alone can restrict demand.
It seems that that comment begs the question why it was necessary to restrict demand in the first place. I think that that was dodging the issue. A major miscalculation has been made and now Mr. Driver tells me that the London ambulance service is hoping to recruit more men, and perhaps women, to fill the gaps in the present provision.
I ask my hon. Friend the Minister three specific questions. First, when will the shortfall be made up? Secondly, is the recruitment of the additional ambulance men subject to any financial restraint or cash limit? Thirdly, when will the 70 per cent. cut in non-emergency provision in Bromley be restored?
I came into politics, as I am sure my hon. Friend did. to improve the lot of those whom I represented. Cuts in ambulance provision of this nature and magnitude, cruelly affecting the most vulnerable sections of the community, make a mockery of all that I have been seeking to do throughout my period in public life. I beg my hon. Friend to act, and to act quickly, to restore the qualities of care and compassion both to the London ambulance service and to our Government.

The Parliamentary tinder-Secretary of State for Health and Social Security (Mr. Ray Whitney): I am grateful to my hon. Friend the Member for Ravensbourne (Mr. Hunt) for the opportunity to respond to what is clearly an important matter. I was already well aware of the strength of his feeling on the subject, but he has reinforced my impression of his deep concern. I am grateful also for the opportunity to respond to the intervention of my hon. Friend the Member for Croydon, North-West (Mr. Malins). I accept, too, that he is disturbed about what has been happening to the ambulance service for his own constituents.
I must say, at the outset, that we recognise that there have been problems and indeed, in some cases, serious


problems, and improvements must be made. I hope that I shall give my hon. Friends some reason for believing and hoping that those improvements are now in train. Certainly, positive things are happening.
I shall attempt, initially, to set the whole effort in context. These days, we hear far too much about expenditure cuts in the National Health Service. As my hon. Friends the Members for Croydon, North-West and for Ravensbourne recognise, the National Health Service is enjoying a significant increase in resources—a 24 per cent. increase in real terms since 1979.
We recognise that the pressures on the service have increased because of its success. Factors such as the ageing population, our success in making medical advances, and the additional number of nurses and doctors we have recruited all put pressure on the service. The issue also involves the operation of the resource allocation working party, which is known as RAWP.
However, tonight we are talking about the ambulance service. Since the Conservative party came to office it has increased ambulance service expenditure by almost 10 per cent. in real terms. Some of the increase has been shared by the London ambulance service, to which my hon. Friends referred, as it covers Bromley and Croydon.
A new salaried structure for ambulance men and women was introduced recently. The objective of the development was to lead to a more efficient and effective service which was more sensitive to the needs of patients. It was welcomed not only by the management side but by the trade union side of the ambulance Whitley council. There was no intention that the new salaried structure should reduce the level of service provided to the general public as a consequence of the agreement. The purpose of the salaried structure was to replace a pay system which encouraged inefficient working practice.
Both management and the trade unions recognised the importance of reducing overtime to the absolute minimum necessary for operational purposes, and the need to eradicate other working practices which frustrated the establishment of a more cost-effective and efficient ambulance service. The "all-in" salary replaced the former system under which the basic rate of pay was substantially enhanced by additional payments for overtime, shift and weekend working. In many services, but not in the London ambulance services, bonus payments were also made. Now, the basic rate covers all payments for a standard working week worked round the clock and seven days a week as operational needs may require.
The national agreement provided management with the opportunity to review critically, for example, the level of accident and emergency cover to ensure that the level provided matched that indicated by operational need. It provided for rotas to be reviewed and, where necessary, changed, using the criterion that operational necessity is the basis for staff being on duty. The agreement also encouraged the development of extended training in certain life-saving techniques. Out-patient and day centre arrangements were also to be reviewed and altered to provide the optimum vehicle and manpower utilisation. The agreement provides, too, a commitment for working practices to be kept under continuing review and for changes to be made where indicated.
Our constituency experience over the years has shown us there have been serious inefficiencies and waste in the Health Service. I am certain that our basic principle, which was carefully worked out with specialist experts who were

brought in to advise, is the right way to go. There is no doubt, however, that there have been problems. The national agreement on salaried status was expected to result in major changes in the organisation and delivery of ambulance services and to lead to an improved service to patients, which is what we seek. There have been teething troubles. Although we are not resigned to that, the problems might be regarded as not particularly surprising. Regrettably, this has been happening in London recently and in other parts of the country.
The London ambulance service management has reviewed its working arrangements and reached local agreement with the staff about the changes necessary to provide the level of service it considered appropriate. It decided that there was a need to divert more resources to the emergency side of the ambulance service. My hon. Friend the Member for Ravensbourne recognised that. I am sure that he agrees that, when difficult decisions have to be taken, the emergency service must take priority
The changes effected will improve response and activation times and demonstrably provide an improved service which will be of direct benefit to patients. That must be good news. I believe that it will be welcomed by all hon. Members.
This improvement in the emergency service has, as my hon. Friend the Member for Ravensbourne pointed out, had the unfortunate effect of reducing the manpower available to carry out non-emergency duties. We believe that that is a temporary phenomenon. Active steps have been taken to recruit additional staff. Of course, new staff need to be trained to enable them to carry out these important duties. I am pleased to report—I respond to some of the questions put to me by my hon. Friend—that the London ambulance service has been able to recruit 65 new staff who are currently being trained and who will all be available between now and the end of June to carry out operational duties. Further recruitment is taking place and another 32 staff will start training at the beginning of June. The London ambulance service management is encouraged by the response to the recruitment campaign. As an interim measure, the LAS is making use also of the hospital car service, taxis and other hire cars. It has offered district health authorities the loan of ambulances, together with the cash for drivers if suitable people can be recruited locally.
On this issue, it is not a question of money. The Thames regional health authorities have made available additional resources to enable a level of service considered appropriate to be provided. This has taken account of continuing growth in demand for ambulance services, but, of course, this is an aspect in which everyone can help. There is frequently abuse of the ambulance service. I acknowledge that the Health Service has a responsibility to provide the best and most effective service it can. But those responsible for ordering ambulances, and the public have a responsibility to ensure that requests are made only for transport for those patients who meet the medical need criterion. Patients travelling to hospital by public or private transport who receive supplementary benefit or who are on a low income are entitled to reimbursement of their fares.
We regret the inconvenience and distress caused to patients who had their transport cancelled, particularly when they had no time to make alternative arrangements. We believe that the situation should now be improving and that it will continue to do so as the new staff gradually


come on stream. Coupled with the real improvement that has already taken place in the quality of the emergency service in London, I am sure that this demonstrates that, within the resources available, our determination remains clear to provide the best ambulance service possible for London and for my hon. Friend's constituents. I should be grateful if my hon. Friend will convey my regret to his constituents about what has happened so far. However, I

believe that the outlook with respect to the non-emergency services is improving in the directions I have mentioned. Certainly, the emergency services have improved. I hope that the new arrangement and the new salaried structure will benefit not only ambulancemen but, what at the end of the day is infinitely the most important, the Health Service patients—our constituents.

Question put and agreed to.

Adjourned accordingly at sixteen minutes to Eleven o'clock.